Summary of the Agricultural Pesticide Industry Conference Call Industry Overview - The agricultural pesticide industry is currently experiencing a contraction in supply and rising costs due to environmental inspections, safety checks, and raw material price increases. The China Pesticide Industry Association has called for a reduction in internal competition, which may impact future supply-demand dynamics and cost control [1][2][20]. Key Trends and Highlights - The agricultural pesticide sector has seen a significant year in terms of prices, demand, and stock market performance, becoming a key focus in the chemical investment landscape. After four years of declining price indices, a resurgence has been noted [2][20]. - The market can be categorized into four main lines: 1. Supply-side contraction due to accidents and stricter inspections 2. Rising costs from raw material price increases 3. Demand growth driven by agricultural trends and pest issues 4. Overcapacity in the industry [3][20]. Specific Product Insights - **Chlorantraniliprole (康宽)**: Following the expiration of its patent, domestic production capacity has increased, leading to price fluctuations. Prices peaked at nearly 300,000 yuan due to an incident in Shandong but have since decreased to 245,000 yuan [5][20]. - **Imidacloprid (吡虫啉)**: Prices have rebounded from 66,000 yuan to around 70,000 yuan due to rising raw material costs, with expectations for further increases driven by seasonal demand in South America [9][20]. - **Acetochlor (烯草酮)**: Experienced a significant price increase due to a production halt, with prices rising from 80,000-85,000 yuan to over 100,000 yuan, indicating the impact of supply disruptions [11][20]. - **Isopropylamine (异丙甲草胺)**: Expected to benefit from raw material supply constraints and demand for alternatives to Ethyl Acetate, showing promising market prospects [12][20]. Trade Dynamics - Trade between China and India in the pesticide sector is on the rise, with significant increases in demand and inventory replenishment observed. The production of orange products is expected to grow by 15-20% in 2025 [18][20]. Cost Implications - Rising raw material costs have significantly impacted the pesticide industry, with examples such as borohydride prices increasing from 78,000 yuan to 92,000 yuan due to anti-dumping tariffs [19][20]. - The cost of key raw materials like diethylhexylamine has risen due to environmental inspections and factory shutdowns, further driving up overall production costs [16][20]. Regulatory Developments - The China Pesticide Industry Association has initiated a campaign against internal competition, focusing on strict management of highly regulated pesticides and implementing traceability for key products [33][34][20]. - Future product standards are expected to be revised to promote high-quality development, with an emphasis on improving impurity limits for major pesticides [35][20]. Market Outlook - The agricultural pesticide market is expected to maintain a positive outlook, with several products showing strong demand and price resilience. The overall supply-demand balance remains a critical factor to monitor [20][30].

Core Viewpoint - ST Hongtai announced a price adjustment for its 97% chlorantraniliprole product to 300,000 yuan per ton, a more than 40% increase compared to last year's low of 210,000 yuan per ton, primarily due to limited upstream raw material supply and rising costs [1][3]. Industry Overview - Chlorantraniliprole is the world's largest insecticide, with annual global sales exceeding $2 billion. After the expiration of its compound patent in China in August 2022, market prices continued to decline, with a cumulative drop of 34.38% in 2024. However, since 2025, prices have rebounded due to low effective capacity release influenced by intermediates and operating rates, rising to 228,000 yuan per ton on May 25, an increase of 8.57% [3]. - Currently, there are over 100,000 tons per year of chlorantraniliprole production capacity under construction or planning in China, but the progress of planned capacity construction has slowed due to the impact of intermediate K amine supply and declining raw material prices [3]. Market Reaction - Following the price adjustment announcement, the pesticide sector continued to show strength on June 9, with stocks such as Changqing Co. and Guangkang Biochemical hitting historical highs, and ST Hongtai and other stocks also rising [3]. - Analysts generally believe that chlorantraniliprole prices are likely to experience a phase of upward momentum. Future project approvals and production regulations involving hazardous chemical reactions such as nitration and chlorination are expected to become stricter, benefiting leading companies in the chemical industry that can maintain stable production of existing products [3]. Company Responses - Due to changes in market supply dynamics, investor interest in companies involved in chlorantraniliprole has increased, prompting several listed companies to respond. Lianhua Technology stated that it provides advanced intermediates through a CDMO model and does not directly produce the product, indicating limited overall impact on the company. Huailong Co. is steadily advancing its chlorantraniliprole raw material and intermediate project with an annual output of 2,000 tons. Lier Chemical is orderly constructing a 5,000 tons/year production facility. Changqing Co. confirmed that its insecticides are currently in normal production. Liming Co. noted that if chlorantraniliprole supply tightens, it would boost demand for alternatives such as abamectin and methomyl [4].