How long can the glyphosate market last?

On the 12th, after experiencing a period of downturn, related stocks in the glyphosate sector broke out again.

On the same day, the glyphosate stocks generally soared. Yangonong Chemical Co., Ltd. bucked the trend and closed at 26.57 yuan; Jiangshan shares, Xinan shares, Sanonda A and Red Sun rose 7.34%, 4.77%, 3.25% and 2.40%, respectively.

With the increase in the price of glyphosate and the shortage of supply, the performance of glyphosate-related stocks has risen simultaneously with the stock price. Although the current situation is relatively good, the question of how long the market can continue is still questionable.

Significant gains in price increase performance There is a market view that the sharp increase in the glyphosate sector on the 12th is due to the strong pre-increase in the first quarter earnings of Yangnong Chemical. On April 12th, Yangnong Chemical announced that its first-quarter performance was expected to increase by 70% to 110% due to the increase in prices of its main product, glyphosate, which was much higher than last year's 26%.

In addition to Yangnong Chemical, Jiangshan shares, which belong to the glyphosate sector, also exceeded market expectations significantly. The company previously forecast that it is expected that net profit attributable to shareholders of listed companies will be about 52 million yuan in the first quarter of this year, compared with a loss of 34.19 million yuan in the same period of last year.

In addition, the main glyphosate and *** of Sanonda A on April 2 release of the first quarter performance forecast, is expected to achieve a net profit attributable to shareholders of the parent company in the first quarter of this year is about 35.55 million yuan to 42.09 million yuan, year-on-year growth 150%~200%; The reason for the change in performance is that the company's main product production, sales volume and sales price have both increased compared to the same period of last year.

It is understood that since 2013, glyphosate has continued to increase the price of original drugs in 2012, and prices have soared. Since 2012, the price of raw glyphosate powder has risen by more than 30%. The related listed companies have benefited greatly from this result, and the overall stock price of this subject has also continued to rise.

Affected by the price increase of glyphosate, Yangnong Chemical, Xinan, Jiangshan, Sanonda A and other stocks benefited significantly. Last year's results achieved substantial growth. Last year, net profits of Jiangshan, Xin'an and Hongsun increased by 560. %, 680%, and 323%. At the same time, the stock price of the company has also increased significantly. According to statistics, from the beginning of last year to the present, the Jiangshan shares, Xin'an shares and Yangnong Chemicals, which are known as the “Pesticide Stocks Sanjie”, have risen 341.62%, 109.05% and 81.49% respectively.

With regard to the price increase of glyphosate, Shenyin Wanguo Securities believes that the overseas formulation companies represented by Monsanto and Syngenta have increased the procurement of glyphosate in China since the second quarter of 2012. The main reason.

Demand is increasing, while supply is gradually decreasing. Many analysts believe that tight supply is the main reason for the recent surge in glyphosate prices. It is understood that the price of glyphosate has fallen sharply after the sharp increase from January to September 2012. However, under the influence of factors such as environmental protection verification and peak seasons, the supply of glyphosate has become tight and prices have soared again. Statistics show that the price of glyphosate has increased from approximately RMB 32,800/t in early 2013 to approximately RMB 3,700/t currently. .

Some brokerage analysts pointed out that as the area of ​​overseas planting industries has expanded significantly, the demand for herbicides by enterprises has increased and orders have been abundant. Coupled with the increase in environmental protection thresholds, most SMEs are restricted from production, and the market will be in a situation where supply exceeds demand.

How long can the hot market last?

With the benefit of rising prices, the performance of the glyphosate stocks has soared, and the share price has soared. How long will the popular market last?

Zhou Xiaobo, an analyst at Shenyin Wanguo, pointed out that the degree of glyphosate boom is expected to continue to rise in 2013. From the demand side, the global demand growth of glyphosate will exceed 10% in 2013, which corresponds to the demand for 70,000 tons of glyphosate raw powder. Incremental. From the supply side, assuming that overseas 2013 production is the same as in 2012, although the domestic production capacity is already high, it is still difficult to meet the demand of 70,000 tons. In addition, environmental verification will delay the launch of new production capacity. The shortage of glyphosate industry will continue at least until the second half of 2013.

Guodu Securities researcher Wang Shuang pointed out that the supply of glyphosate is tight and will be concentrated in the industry. The current order of glyphosate enterprises is full, and the company basically completes orders based on orders. There is no energy to accept new orders. The production of glyphosate will generate large amounts of waste water. If it is completely treated and reaches the discharge standard, it will need to increase the cost by more than 1,000 yuan per ton.

Wang Shuang thinks that the concentration of glyphosate industry is relatively low. Except for several leading enterprises, most of them have a production capacity of 10,000 to 20,000 tons. Small-scale enterprises have greater pressure on waste discharge, and they are under pressure from environmental protection. Under the relatively large circumstances, the operating rate has to be reduced. The production and sales of the industry are concentrated in leading enterprises such as Yangnong Chemical, Xinan, Jiangshan, and Sanonda.

The first quarter research report of Southwest Securities Chemical Industry also pointed out that the supply of glyphosate is tight and the degree of prosperity is expected to continue. The report said that after the Spring Festival, the supply of glyphosate market was tight, and the market price was scarce. The actual transaction price rose from 31,000 to 33,000 yuan/ton to 34,000 to 36,000 yuan/ton. In March, the output of glyphosate increased by more than 30% year-on-year, and the operating rate of Dachang was relatively high. The reason for the tight supply was the strong domestic and foreign trade demand, and dealers who had not purchased before the Spring Festival focused on placing orders after the holiday. At present, orders for most factories have been exhausted until the end of April. In the medium to long term, environmental protection factors will force a number of small production capacity to close and supply will continue to decrease. Glyphosate is expected to continue in the second quarter.

However, there are different opinions. Such as Dong Xing Securities analyst Liang Bo believes that the limited space for rising glyphosate. “Looking forward to 2013, the driving force for continued price hikes by glyphosate is slightly insufficient. Recently, news of the re-starting of small devices in Inner Mongolia, Shanxi, etc. has been reported, and the supply and demand relationship that has just improved will be subject to deterioration.”

Similar to Liang Bo’s view, some analysts said that due to factors such as environmental protection verification, the shortage of glyphosate supply in the short term is expected to stimulate price increases. However, in the face of interest stimuli, if the operating rate increases, there may be a sudden rise and fall.