Guosen: The import of potassium fertilizer continued to increase in July, and we are optimistic about the further rise in the price of glyphosate in the future.

Guosen released a research report stating that the global potash fertilizer industry is oligopolistic, with significant resource scarcity. The mid- to long-term supply-demand pattern continues to optimize, and potash fertilizer demand is expected to benefit from the growth in biofuel demand due to high oil prices, with product prices likely to rise moderately. There is a supply-demand gap for potash fertilizers domestically, leading to a high dependency on imports. The bank is optimistic about maintaining a high level for the long-term price center of phosphate rock. As the world enters a new inventory cycle, the bank sees systematic competitive advantages in China's agricultural chemicals industry, with global production of active ingredients still having room for growth. The industry's capital expenditure is slowing down, and after efforts to mitigate redundancy, pesticide prices are expected to rebound after bottoming out. Meanwhile, with the cancellation of export tax rebates on pesticides like glyphosate, production costs for pesticide companies are increasing, and outdated production capacity will accelerate elimination. The bank is optimistic about the further price increase of glyphosate in the future. The main points from Guosen are as follows: In July, potash fertilizer imports increased, and port stockpiles grew during the fertilizer usage off-season. China is the largest potash fertilizer consumer globally, while the supply of potash resources is insufficient, with dependence on imports nearing 70%. In 2025, China's potash chloride production is projected to reach 5.82 million tons, a decrease of 6% year-on-year, with imports at 12.614 million tons, virtually unchanged year-on-year. In July, the domestic potash chloride market exhibited a strong supply and weak demand pattern, with prices continuing to decline. At the end of July, the average price of potash chloride in the Baichuan Yingfu market was 3,250 yuan/ton, a month-on-month drop of 0.88% but up 0.62% from the previous year. Domestic potash production remained stable in July, with salt lake production facilities still undergoing maintenance in rotation, resulting in limited supply. Regarding imports, as of July 24, total port stock was approximately 3.33 million tons (including bonded zones), up about 92.49% year-on-year, with some supplies entering the state reserve system. From January to June 2026, potash chloride imports totaled about 8.8034 million tons, an increase of 40.18% year-on-year. In June alone, imports were 1.38462 million tons, down 13.94% month-on-month but up 113.07% year-on-year. Although this import volume was slightly lower than in May, it remained high and significantly above the same period in previous years. China's potash chloride import sources remain stable, with Russia, Laos, Canada, and Belarus collectively accounting for about 92.55%. On the international market, there was significant regional differentiation in July's potash fertilizer market; the European market was supported by tight supply and rising logistics costs, leading to a month-on-month increase in potash chloride contract prices for Q3 deliveries. In contrast, major demand markets such as South America and Southeast Asia experienced downward price pressure due to sufficient supply. Notably, Ural Potash announced the shutdown of its granulation facility in July, with production expected to decline by 30%-40% during the maintenance period, totaling a reduction of around 300,000 to 400,000 tons. This action is likely to alleviate the oversupply pressure on global granular potash. With the upcoming large tenders in Indonesia and Bangladesh, the international potash fertilizer market is expected to gain a new support point. Demand for energy storage continues to improve; maintaining a high price level for phosphate rock in the long term is favorable. According to data from the High Industry Research Institute (GGII), lithium battery shipments in China are expected to reach about 1.2 TWh in the first half of 2026, a year-on-year increase of over 50%. Among these, the shipment volume of power batteries is estimated at approximately 630 GWh, up over 30% year-on-year, while energy storage battery shipments are expected to be about 485 GWh, up over 80% year-on-year. This high growth is driven by the dual resonance of the domestic energy storage demand structure extending from source-grid to diverse scenarios, coupled with a wave of overseas export surges. Subsidy policies in Australia, the Middle East, and Europe have further catalyzed global energy storage demand. The rapid growth of energy storage installations is driving substantial demand for lithium iron phosphate. According to Baichuan Yingfu, in July 2026, China's lithium iron phosphate production is expected to reach 530,000 tons, an increase of 230,000 tons year-on-year, and up 6,000 tons month-on-month. Assuming global energy storage battery shipments reach 600/800/983 GWh in 2025-2027, the corresponding demand for phosphate rock will rise to 600/800/983 million tons, accounting for 4.7%/5.9%/7.0% of Chinas forecasted phosphate rock production, with the consumption share of phosphate resources in the new energy battery sector continuing to rise. On the supply side, China's exploitable phosphate rock grades are declining, with increased extraction difficulty and costs, while the timeline for releasing new production capacity is relatively long, emphasizing the scarcity of phosphate resources. The market price for 30% grade phosphate rock has been running at a high of 900 yuan/ton for over three years. As of July 31, 2026, the tax-inclusive price for 30% grade phosphate rock in Hubei was 1,080 yuan/ton, unchanged from the previous month, and the long-term price center for phosphate rock is expected to maintain a high level. Bayer withdraws its anti-dumping application against glyphosate in China; glyphosate exports decline. On July 17, 2026, just three days before the U.S. Department of Commerce was expected to formally file the case, Bayer's Ruveon company unexpectedly announced the withdrawal of its anti-dumping investigation application against glyphosate from China. The application was submitted on June 30 and withdrawn on July 17, with only 17 days between them. Regarding glyphosate, since March, raw material prices have fluctuated significantly due to the U.S.-Iran conflict, causing production costs for glyphosate to vary. In late April, glyphosate prices in East China soared to 34,500 yuan/ton, but fell to 25,800 yuan/ton on August 10. For glufosinate, in January 2026, the Ministry of Finance and the State Administration of Taxation announced that starting from April 1, 2026, they would cancel export tax rebates on several pesticide active ingredients, including glufosinate and its purified form. This has led to an increase in glufosinate market prices, which as of August 10, 2026, were 49,000 yuan/ton in East China, up 5,100 yuan/ton since the beginning of the year. Notably, according to Baichuan Yingfu, China's glufosinate production increased from 18,300 tons in 2020 to 120,400 tons in 2025, representing an average annual compound growth rate of 45.78%. The price drop of glufosinate has enhanced its cost-effectiveness, leading to a rapid increase in global demand. In terms of exports, in the first half of 2026, China's cumulative exports of other non-halogenated organic phosphorus derivatives reached 320,900 tons, down 2.78% year-on-year, with exports to North America decreasing by 25.58% year-on-year, but exports to Latin America increased by 10.86% year-on-year. Risk warning: Risks related to production safety and environmental protection; risks of agricultural chemical product demand falling short of expectations; market risks caused by capacity expansion; risks associated with fluctuations in raw material prices; risks in international trade, etc.