Core Viewpoint - The report from Kaiyuan Securities indicates a positive outlook for the glyphosate industry, driven by sufficient order backlogs and low inventory levels among major companies since May 2025, leading to continuous price increases for new orders [1] Supply Side - Global glyphosate production capacity is approximately 1.18 million tons per year, with Monsanto's overseas capacity at 370,000 tons (31.4%) and China's capacity at 810,000 tons (68.6%). Major producers include Xingfa Group, Fuhua Chemical, Xin'an Chemical, and Jiangshan Chemical, with the top four companies accounting for 70.7% of the total capacity, indicating a high concentration in the industry [2] - New glyphosate production facilities in China are classified as restricted projects, suggesting limited new capacity in the future [2] Demand Side - Glyphosate's downstream markets include agricultural (over 90%) and non-agricultural sectors, primarily for genetically modified crops. Non-agricultural uses include lawn care, forestry, and shrub weed control. Since May 2025, there has been a significant increase in orders from South America, with major companies reporting strong order intake. The market demand for glyphosate is expected to grow due to the increase in genetically modified crop planting areas and the ban on other herbicides like paraquat [3] Price Review - Since 2020, global agricultural price fluctuations due to the Russia-Ukraine conflict and significant cost increases in raw materials like yellow phosphorus, liquid chlorine, and caustic soda have led to a substantial rise in glyphosate prices from Q4 2021 to mid-2022. However, since the second half of 2022, as major manufacturers have gradually restored production and the overseas market has digested previous inventory, glyphosate prices have entered a downward cycle. Since May 2025, major companies have maintained a strong pricing stance, with new order prices continuing to rise [4] Industry Outlook - In 2023, the EU's renewal of glyphosate regulations has imposed higher purity standards. A special meeting on the "anti-involution" phenomenon in the glyphosate industry was held in Beijing on March 13, 2025, aimed at addressing issues of excessive competition, resource duplication, and shrinking profit margins to promote sustainable industry development [5]

Investment Rating - The investment rating for the basic chemical industry is "Positive" (maintained) [1] Core Viewpoints - The report highlights the stability of the phosphate rock market and the significant price difference between domestic and international phosphate fertilizers, indicating a positive outlook for integrated phosphate chemical companies in terms of profitability and dividend increases [3] - The report emphasizes the supply-side disturbances in glyphosate, with current product prices and profit margins under pressure due to historical lows. It suggests that overseas supply disruptions combined with domestic industry adjustments could improve competitive dynamics and enhance the bargaining power of leading companies [5][24] Summary by Sections Industry Trends - The chemical industry index outperformed the CSI 300 index by 0.7% this week, with 63.9% of chemical stocks showing weekly gains [10][18] - The CCPI (China Chemical Product Price Index) increased by 3.78% to 4175 points as of May 15 [21] Key Product Tracking - The report notes a decrease in inventory days for polyester filament, with prices for POY, FDY, and DTY rising significantly [34][35] - Domestic urea prices have also increased, driven by export policy expectations [34] Recommended and Beneficiary Stocks - Recommended stocks include leading companies such as Xingfa Group, Yangnong Chemical, and Hebang Biotechnology in the glyphosate sector [5][24] - Beneficiary stocks include Jiangshan Co., New安股份, and Guangxin Co. [5][24] Glyphosate Supply and Pricing - Global glyphosate production capacity is 1.18 million tons per year, with China accounting for 68.6% of this capacity. Major domestic producers include Xingfa Group, Fuhua Chemical, and Xin'an Co. [26][30] - Glyphosate prices have been declining, with current prices and price differentials at historically low levels [30][32]