CICC: Glyphosate supply and demand outlook is positive, Q4 prices may still have upward potential

According to the Zhitong Finance APP, China International Capital Corporation (CICC) released a research report stating that since March 2025, the price of glyphosate has been steadily rising, with an accelerated upward trend since May. By the end of August, the price had increased by approximately 24% from the year's low to 27,300 yuan/ton. In the short term, glyphosate prices are expected to rise to 30,000 yuan/ton in Q4 2025, mainly considering: on the demand side, as the peak demand season in North America will begin in October, and multinational agrochemical companies' inventories have basically returned to normal levels, glyphosate demand in Q4 2025 is expected to remain high; on the supply side, considering the progress of engineering construction, the probability of Jiangshan Co., Ltd.'s 50,000 tons/year glyphosate capacity in Guizhou being put into production within 2025 is low, and the new supply in Q4 2025 is limited, leading to a relatively tight balance in the short-term supply and demand relationship. CICC's main viewpoints are as follows: "Anti-involution" catalysis combined with improved supply-demand pattern, glyphosate prices have continued to rebound since March Since March 2025, glyphosate prices have been steadily rising, with an accelerated upward trend since May. By the end of August, prices had increased by approximately 24% from the year's low to 27,300 yuan/ton. The price increase from March to April was mainly due to the anti-involution meeting held by the glyphosate industry on March 13, combined with the opening of the 2025 CAC Agrochemical Expo starting March 17, leading glyphosate producers to gradually implement production cuts, resulting in a rebound from low prices. Since May, glyphosate prices have accelerated upward, primarily due to a noticeable improvement in demand, especially the release of glyphosate demand in South America, such as Brazil and Argentina, which has driven the continuous improvement of the industry's supply-demand relationship. According to customs import and export data, in the first seven months of 2025, China's exports of other non-halogenated organic phosphorus derivatives (mainly glyphosate/glyphosate ammonium) reached 391,000 tons, a year-on-year increase of 12%, exceeding the level of the same period in 2022. In addition, some domestic producers have successively conducted production halts and maintenance due to environmental and high-temperature reasons, leading to a slight decrease in industry operating rates, tightening the overall supply-demand relationship for glyphosate and accelerating inventory depletion. Industry profitability has significantly recovered Benefiting from favorable prices, glyphosate companies have recently seen a noticeable improvement in profitability. As of August 29, the price of glyphosate in China was 27,300 yuan/ton, estimating the price difference of the glycine method to have recovered to approximately 13,600 yuan/ton, a significant increase from about 9,000 yuan/ton in March. Considering depreciation, labor, and other production costs, it is estimated that the current gross profit for glyphosate producers may reach about 3,000 yuan/ton, indicating a significant recovery in industry profitability. North American peak season is approaching, and there is still upward space for glyphosate prices in Q4 In the short term, glyphosate prices are expected to rise to 30,000 yuan/ton in Q4 2025, mainly considering: on the demand side, as the peak demand season in North America will begin in October, and multinational agrochemical companies' inventories have basically returned to normal levels, glyphosate demand in Q4 2025 is expected to remain high; on the supply side, considering the progress of engineering construction, the probability of Jiangshan Co., Ltd.'s 50,000 tons/year glyphosate capacity in Guizhou being put into production within 2025 is low, and the new supply in Q4 2025 is limited, leading to a relatively tight balance in the short-term supply and demand relationship. Target aspects Recommended targets benefiting from the elasticity of glyphosate prices include Xingfa Group (600141.SH), Jiangshan Co., Ltd. (600389.SH), Xin'an Chemical (600596.SH), Yangnong Chemical (600486.SH), and Anhui Guangxin Agrochemical (603599.SH) Risk Factors Significant decline in agricultural product prices, geopolitical risks