The price of glufosinate-ammonium hit a 6-year high

In the global herbicide market, after the dominant glyphosate price hit a 10-year high, the world's second-largest genetically modified crop tolerant to the herbicide glufosinate also followed suit, with its price hitting a record high in more than six years

Industry insiders said that under the influence of factors such as rising raw material prices, expanding downstream demand, and difficulty in releasing production capacity, the price of glufosinate-ammonium will continue to fluctuate at a high level in the short term

Raw material prices rise

There are two main synthetic routes for glufosinate-ammonium: Grignard-Strecker route and Bayer Hoechst route

From the perspective of raw materials, the price of raw materials such as yellow phosphorus has risen recently, and the supply of intermediates has continued to be limited, supporting the rise in the price of glufosinate-ammonium

The industry is generally optimistic about the later trend of the yellow phosphorus market

From the perspective of raw material phosphate ore, the overall supply of phosphate ore market is currently tight, and the market is still mainly supplying old customer orders.

In terms of supply and demand, the prices of downstream phosphoric acid and other products have risen, and the trading atmosphere in the yellow phosphorus market is better, and the supply of goods is relatively tight

On the whole, market confidence is good and the upstream and downstream support is strong.

　　Downstream demand expands

　　Since the herbicide paraquat is more toxic to humans and animals, it has been banned in many countries.

　　According to the statistics of Phillips McDougall, the market value of glufosinate ammonium has steadily increased in the past 10 years, and the market value in 2020 will reach US$1.

　　"In recent years, with the increase in the penetration rate of genetically modified crops, the implementation of paraquat prohibition policy and the promotion and application of glufosinate-ammonium compound products, the demand for glufosinate-ammonium is expected to further increase

　　It is reported that due to the continuous increase in the price of glyphosate, due to price comparison factors, some domestic users have begun to choose glufosinate as a substitute, which has also led to a substantial increase in the demand for glufosinate

　　Production capacity is difficult to release

　　Reduced supply is also one of the main reasons for the price increase of glufosinate-ammonium

　　Industry insiders believe that there is currently no new capacity on the supply side of glufosinate-ammonium, and domestic companies' operating rates and inventories are at historically low levels.

　　However, it is worth noting that some domestic agrochemical companies have launched glufosinate-ammonium projects or implemented expansion plans

　　Zhang Bo of Anhui Zhongnong Zongheng Agrochemical Information Consulting Co.

　　Lier Chemical stated that the herbicidal activity of L-Glufosinate-ammonium is twice that of ordinary glufosinate-ammonium, and the application cost is basically the same.
The development and production of L-Glufosinate-ammonium will greatly reduce the amount of the original medicine
.
Therefore, the company is actively deploying and constructing L-glufosinate-ammonium projects
.
At present, the company plans to build 30,000 tons/year and 3,000 tons/year L-glufosinate projects in Mianyang base and Guang'an base respectively.
The production capacity of Guang'an base is expected to be released in 2022
.

　　However, CICC believes that during this expansion wave, some companies have no experience in the production of glufosinate-ammonium, and it is still difficult to determine whether the capacity under construction in the later stage can continue to supply stably, and the actual progress still needs to be continuously observed
.
As there is no actual new capacity release on the supply side in the second half of the year, the boom in the glufosinate-ammonium market is expected to continue
.

　　Li Ji, a researcher at Debon Securities, believes that Lier Chemical, as a global leader in glufosinate-ammonium, has significant scale and cost advantages.
The key intermediates methyl phosphorous dichloride and glufosinate-ammonium have been combined and put into production, continuing to consolidate cost advantages while horizontally.
Expanding new products, the company's performance is expected to continue to grow, maintain the "buy" rating
.