Summary: The feed-grade amino acids sector is witnessing a strategic divergence, with lysine capacity continuing its aggressive expansion while threonine producers adopt measured growth approaches. China dominates both markets, commanding 76% of global lysine and 93% of threonine production in 2023 – a hegemony that’s reshaping trade flows and pricing dynamics worldwide.
Lysine: China’s Expansion Offsets Global Capacity Contraction
Despite a 75% global utilization rate in 2023, Chinese lysine capacity grew 17% to 3.5 million tons, led by industry titans Meihua Group (1M+ tons capacity) and Star Lake Bioscience. This contrasts sharply with Western retrenchment – ADM’s solid lysine exit (2021) and Russia’s 80kt Premix Plant shutdown (2023) exemplify the sector’s geographic consolidation. With Meihua’s new 400kt project (2025) and Fufeng’s planned US facility, Chinese players are strategically positioning for export dominance as 98% lysine prices demonstrate unusual resilience against weaker 70% variants.
Threonine: Maturation Brings Supply Discipline
The threonine market’s 95% Chinese concentration has entered equilibrium after a decade of volatility. Meihua (500kt capacity) and Fufeng (263kt) now control nearly 60% of global supply, with CR4 stability at 88-91% since 2019. Notably, only CJ Bio’s 23kt expansion breaks an industry-wide capex freeze following the 2023-24 demand recovery that saw production surge 31% YoY. This newfound discipline suggests threonine may escape lysine’s chronic oversupply issues, though Q1 2025 price softness warrants monitoring.
Pricing Drivers: Beyond Feed-Demand Cycles
Historical analysis reveals three structural price determinants:
1. Feed substitution economics: Persistent soybean meal price weakness (down 2 years through May 2025) pressures amino acid premiums
2. Geopolitical logistics: Red Sea disruptions and European plant turnarounds created 2024’s export-led lysine premium
3. Regulatory arbitrage: China’s energy controls and environmental inspections continue causing supply shocks
As monetary easing potentially reignites agricultural commodity inflation, amino acid producers face both tailwinds (cost-push pricing) and headwinds (demand destruction). The coming quarters will test whether threonine’s supply discipline can outperform lysine’s expansion-led volatility – with China’s production decisions remaining the ultimate market arbiter.
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