On April 12th, the glyphosate sector experienced a strong rebound after a period of decline, with several key stocks seeing significant gains. Yangnong Chemical closed at 26.57 yuan, while Jiangshan Shares, Xinan Shares, Sanonda A, and Red Sun rose by 7.34%, 4.77%, 3.25%, and 2.40% respectively. This surge came as the price of glyphosate continued to climb, driven by supply shortages and increased demand.
The sharp rise in stock prices coincided with improved earnings reports from major players in the industry. Yangnong Chemical announced that its first-quarter profits were expected to jump between 70% and 110%, largely due to higher glyphosate prices. The company's performance far exceeded last year’s growth of 26%, signaling a strong market outlook. Similarly, Jiangshan Shares reported a massive turnaround, moving from a loss of 34.19 million yuan in the same period last year to a forecasted net profit of about 52 million yuan this quarter.
Sanonda A also showed impressive results, with a projected net profit of 35.55 million to 42.09 million yuan for the first quarter—up 150% to 200% year-on-year. This growth was attributed to increased production, sales volume, and selling prices of its main product.
Since 2012, glyphosate prices have steadily risen, with raw material costs increasing by over 30%. This trend has benefited listed companies significantly, leading to sustained stock price growth. For example, Jiangshan Shares, Xin’an, and Hongshun saw net profit increases of 560%, 680%, and 323% respectively last year. Their stock prices also surged, with Jiangshan Shares rising by 341.62%, Xin’an by 109.05%, and Yangnong Chemical by 81.49%.
Analysts believe that the current price surge is driven by both strong global demand and supply constraints. Shenyin Wanguo Securities noted that international formulation companies like Monsanto and Syngenta began increasing their glyphosate procurement from China in the second quarter of 2012. Meanwhile, environmental regulations and seasonal factors have led to tighter supply, causing another price spike.
According to recent data, glyphosate prices have climbed from around 32,800 yuan per ton in early 2013 to approximately 37,000 yuan today. Some analysts suggest that the tight supply situation could persist into the second half of 2013, as new production capacity remains delayed due to environmental compliance requirements.
However, not all experts are optimistic. Guodu Securities analyst Wang Shuang pointed out that many small-scale producers are struggling with waste treatment costs, which can add over 1,000 yuan per ton. This has forced some companies to reduce output, further tightening the market. As a result, larger firms like Yangnong Chemical, Xin’an, Jiangshan, and Sanonda are benefiting from the consolidation.
Southwest Securities’ research report also highlighted the tight supply situation, noting that glyphosate prices have risen sharply since the Spring Festival. Orders are already booked until the end of April, and production is running at high capacity. In the long term, environmental regulations are expected to push more small producers out of the market, reducing supply further.
Despite these positive signs, some analysts caution that the market may be vulnerable to sudden shifts. Dong Xing Securities’ Liang Bo argued that the room for further price increases is limited, as small facilities in Inner Mongolia and Shanxi are being reactivated. This could disrupt the current supply-demand balance and lead to volatility.
In conclusion, while the glyphosate market shows strong momentum, its sustainability remains uncertain. Factors such as demand growth, environmental policies, and production capacity will play critical roles in determining how long this bullish trend can continue. Investors should remain cautious, as the sector is still subject to various risks and uncertainties.
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