China’s methionine market remains flat in Q1, 2017 06-02-2017

China’s methionine demand is rising faster than the global average, due to the growing demand for China’s wealthy middle class for meat products. However, in the first quarter of 2017, China’s methionine business remained on a flat level, since the outbreak of bird flues as well as environmental protection measurements have caused limitation on demand.


 

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In the year 2015, the global methionine market has reached over USD4.5 billion. According to experts’ view, with an annual CAGR of about 6.9%, the market value will even surpass USD7.3 billion by the end of 2022. The enormous growth can be explained by the surging demand for animal feed, used in livestock and farming industries, which have the main task to feed a growing global population with huge appetite for meat.  


It is worth mentioning, that several outbreaks of animal diseases are increasing the awareness for healthy animal feed and further boosting the demand for the important amino acid methionine.  


Asia-Pacific is the leading market for methionine, with huge populated countries like India and China, which growing middle classes are thriving the need for meat, and hence methionine for the production of feed.  


While the global annual growth rate for methionine demand has been about 6% since the year 2013, China’s growth rate in demand is rising even higher. After all, the demand is rising annually by about 7% up to 10%.  


The L-methionine markets in China have been remaining stable in the first quarter of 2017 but on a low level. The new production method, used by an increasing number of manufacturers, namely the fermentation process, enables the production under less costs. Hence, the demand will be higher for L-methionine compared to the more expensive product DL-methionine.  


However, the weak demand in Q1 in China combined with the outbreaks of avian influenza has caused a flat market situation, according to market intelligence firm CCM. The outbreak of several bird flues has caused severe damage to the domestic livestock industry in China and hindered high demand for feed products.  


Due to the avian influenza outbreaks, not only affected livestock companies were forced to limit or stop business, but also non-affected companies were ordered by the government to reduce their business in order to avoid the spread of the flu to humans.  


As a result of the production limitations, the prices of chicken and eggs have dropped significantly in the last months. The low demand for feed then have reduced the price for methionine by almost USD 100 per tonne.  


Besides the significant impact of avian influenza, the methionine industry in China has been impacted by two more factors, which play an important role in the development.


 


The environmental pressure is still acute for China’s manufacturers in the heavy polluting industries, which the methionine business belongs to. According to CCM, the environmental pressure and measurements have the biggest impact on the domestic methionine business in China. Manufacturers are ordered by the government to obey strict waste disposal and pollution requirements and often need to limit or even stop the production if the regulations can’t be achieved.  


The other factor with massive impact is a threat of methionine overcapacity in China. The profitable methionine business in China and worldwide has led many manufacturers to expand their production and install new projects. Hoping for higher revenue out of the new product lines, the danger of methionine oversupply is getting acute. Big enterprises like Shandong NHU and Bluestar Adisso, and Evonik have announced production expansions, which may exceed the growing demand for methionine.  


Especially Bluestar Adisso, one of the world largest producers of animal nutrition like methionine, has recently announced the establishment of a production line capable to produce methionine in powder form. The company aims with this strategy to meet the growing meat demand, especially in China.  


Looking at the high fluctuations of prices for animal feeds, companies like Adisso are searching for more stable solutions with high safety and quality to ensure a healthy market condition.  


All in all, China’s methionine manufacturers are looking forward into the near future, expecting a continuing increasing demand for methionine as well as witnessing enhanced production techniques. However, the thread of the bespoken points needs to be observed, as they will have an effect on the development.  


About methionine

Methionine is a major amino acid, which helps the organism to break down fat. As it is classified as one of the essential amino acids, that can’t be produced by the body itself, it is important that methionine is ingested by the consumption of food. 


About CCM

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets.  


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