August 25 Pesticide Daily Review: Upstream and Downstream Forces in Conflict

The pesticide market remained generally weak in sentiment. Downstream demand follow-up was limited during the traditional off-season, leaving the market without sufficient drivers. The logic supporting higher costs has moderated as geopolitical tensions eased. Some products still have cost support, while supply has contracted to some extent due to various factors. However, price increases have continued to trigger negative feedback downstream because of weak transmission along the industrial chain, and the market is waiting to see whether end-user demand can provide stronger support. Tensions in the Middle East remain elevated. Although the two sides have not resumed armed conflict, the issue of control over navigation through the Strait of Hormuz remains difficult to resolve. Combined with expectations of stronger US economic sanctions on Iran, higher freight costs and damage to petrochemical supply chains continue to provide cost support. Overall, market caution persists. Price increases among some upstream products continue to face resistance in transmission to downstream markets, upward momentum has paused, and the wait-and-see mood remains apparent. Attention should remain on geopolitical developments, export activity, and seasonal demand.

Market Analysis

Herbicides: The herbicide market is currently consolidating at low levels. Prices are close to the cost line, leaving limited room for further declines, but weak demand is also limiting upside potential. Although geopolitical risks continue to support higher costs, insufficient demand absorption has failed to provide market momentum. On the policy side, the United States has invoked the Defense Production Act to designate elemental phosphorus and glyphosate-based herbicides as critical defense materials, requiring priority supply to the domestic market. This continues to provide some international support for the domestic market. Overall, downstream buyers are mainly purchasing to meet rigid demand. The market atmosphere is weak in the short term, and attention should focus on whether exports improve and on changes in geopolitical sentiment.

Yellow Phosphorus: Yellow phosphorus prices continued to rise today. Expectations of some tightening in supply from Guizhou supported prices, with other regions following the move. Producers are currently mainly shipping contracted orders. Market deliveries are acceptable but lack strength, and the drivers for further price increases require assessment. On the upstream side, producer inventories remain relatively limited in the short term, and some producers have recently reduced output, leaving conditions for price support in place. However, downstream acceptance of high prices remains limited, and buyers continue to seek lower prices. In the short term, upstream producers are shipping contracted orders while downstream buyers purchase according to demand. Following the price rebound, the market will mainly observe the strength of demand follow-up. If demand slows, market sentiment may again come under pressure. The market is expected to remain relatively firm but volatile for now.

Pesticide Market Price Overview

Herbicides:

98% 2,4-D fell by 500 yuan to 13,500 yuan/tonne; 95% glufosinate rose by 500 yuan to 51,000 yuan/tonne; 95% nicosulfuron fell by 2,000 yuan to 153,000 yuan/tonne; 96% bispyribac-sodium fell by 5,000 yuan to 200,000 yuan/tonne; 97% haloxyfop-P-methyl fell by 3,000 yuan to 115,000 yuan/tonne.

Insecticides:

97% nitenpyram fell by 3,000 yuan to 113,000 yuan/tonne. 97% pymetrozine fell by 2,000 yuan to 96,000 yuan/tonne.

Fungicides:

95% tricyclazole fell by 2,000 yuan to 62,000 yuan/tonne.