In April 2018, China's
methionine prices remained weak, due to the flat demand from the downstream
industries. Market intelligence firm CCM has spoken to an industry expert to
share opinions on the development in China.
Bluestar
Adisseo on March 12 its decision to raise its quotations for several methionine
products by 8%, in China and Asia. Actually, the world's biggest methionine
producer Evonik had taken the lead in raising methionine quotation. On 5 March,
Ningxia Unisplendour also raised its quotations for methionine.
According
to CCM's investigation, the price of methionine has increased significantly in
many parts of China, and the trading volume is currently high.
One
of the reasons is the demand for feed decreased. Slaughtering enterprises were
not active in purchasing, due to the fact that had not yet operated at full
capacity and the demand for meat reduced after the Spring Festival holiday.
Also, breeding enterprises' eagerness to replenish their inventories was
dampened by the high feed price, which was resulted from the constant increases
in raw materials like corn and soybean.
CCM
predicts that methionine price will gradually increase in China in the coming
quarter, as the supply-demand situation improves and the costs of raw materials
go up. In the meantime, the increase will be limited given the flat demand from
the feed industry.
To
analyse the current methionine situation in China, CCM has spoken to an
industry insider.
According
to the expert, the demand from the downstream enterprises was flat because they
had enough inventories, which were prepared before the Chinese Spring Festival
holiday; however, production continued during the holiday. In this context, the
supply-demand tension led to decreases in prices.
He
furthermore added that a sluggish demand did exist in China. However, in Q1
2018, the gap between the supply and demand was only marginal, because the
import volume of methionine went down by 30% MoM in March, and the total
production in China remained the same as before.
In
fact, a large quantity of methionine went directly to distributors and the
large-scale users, which had reached their orders at a similar price as the
first ten days of March, which was relatively low. So, the high price was
mainly quoted for the small-scale enterprises. Without the support of the
demand, producers became difficult to continue to raise quotations;
distributors and large-scale users thus made discounts.
Domestic
methionine prices have almost reached a low level, and the low prices will
stimulate feed producers to use more methionine. In the long run, the demand
for methionine will increase.
What’s
more, domestic feed production has become increasingly centralised, as the
large-scale producers are rapidly developing while the small ones have been
eliminated from the market. Liquid methionine is reportedly better for the
production of large producers. In this context, Bluestar Adisseo's efforts in
this will facilitate its future development with a larger market share, the
expert added to the statement.
About the article
CCM
is China’s leading market intelligence provider for the fields of agriculture,
chemicals, food and feed.
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