Pesticide Daily Review, July 1: Weakness Remains Hard to Reverse

The pesticide market remained generally weak in sentiment. Downstream demand was mainly need-based, while market drivers remained insufficient, and the cost-push logic has slowed as geopolitical tensions cooled. Some products still found support from temporary supply-demand mismatches, but high prices continued to trigger downstream negative feedback due to weak transmission along the value chain. The market is still waiting to see whether end-user demand can provide further support.

In the international market, expectations remain for stronger trade flows toward China. However, actual external demand will depend more on overseas seasonal cycles and the stockpiling willingness of international traders. Overall, this still provides medium- to long-term support for market sentiment.

In the short term, tensions in the Middle East have shown signs of easing. The U.S. and Iran have preliminarily signed a memorandum of understanding, significantly reducing the geopolitical risk premium. However, the market is still watching whether navigation through the Strait of Hormuz can be materially restored. Supply disruptions in the petrochemical chain remain difficult to reverse in the short term. Cost-driven momentum may slow, but bottom support is likely to remain.

Overall, cautious sentiment persists. Price increases in some upstream products continue to face transmission resistance downstream, upward drivers have weakened, and the market remains in a wait-and-see mode. Going forward, attention should be paid to geopolitical developments, export strength and seasonal demand.

Market Analysis

Herbicides

The herbicide market continued to weaken. Earlier inventory buildup among traders has led to some low-price selling. Although cost pressure from geopolitical risks still exists, expectations have eased after the broader peace outlook became clearer, while insufficient demand acceptance has failed to provide new upward momentum.

The U.S. has invoked the Defense Production Act to designate elemental phosphorus and glyphosate herbicides as critical defense materials, requiring priority protection of domestic supply. This move still provides support to the domestic market.

Overall, downstream buyers are mainly purchasing on a need-only basis. After short-term seasonal demand support weakens, market sentiment continues to soften. Further attention should be paid to whether exports improve and how geopolitical sentiment evolves.

Yellow Phosphorus

Recently, trading sentiment in the yellow phosphorus market has continued to weaken. Downstream buyers have kept pushing for lower prices, actual transaction support has been limited, market participants remain cautious, and the price center has continued to move lower.

As sulfur prices have declined, the substitution premium of thermal-process phosphoric acid has weakened to some extent. The market is expected to remain cautious for now, while overall sentiment in the yellow phosphorus market may remain under pressure. Bearish expectations are difficult to reverse, and the market is likely to continue correcting in the short term.

Pesticide Market Price Overview

Herbicides

98% 2,4-D, down RMB 500 to RMB 16,000/tonne;

96% Fomesafen, down RMB 2,000 to RMB 108,000/tonne.

Insecticides

97% Pymetrozine, down RMB 2,000 to RMB 102,000/tonne;

95% Abamectin Technical Powder, down RMB 10,000 to RMB 390,000/tonne;

70% Emamectin Benzoate, down RMB 10,000 to RMB 570,000/tonne;

98% Monosultap, down RMB 3,000 to RMB 82,000/tonne;

95% Cartap, down RMB 2,000 to RMB 24,000/tonne;

90% Cartap, down RMB 2,000 to RMB 22,000/tonne;

96% Chlorantraniliprole, down RMB 5,000 to RMB 215,000/tonne.

Fungicides

96% Hexaconazole, down RMB 2,000 to RMB 88,000/tonne;

95% Fluquinconazole, down RMB 5,000 to RMB 240,000/tonne.