In May 2016, some leading lysine producers
in China raised their quotations. As of 24 May, most quotations for lysine in
the market exceed USD1.24/kg (RMB8.00/kg):
Source: Baidu
-
Global Bio-chem Technology Group Co., Ltd.
(Global Bio-chem): 98% lysine up to USD1.29/kg (RMB8.3/kg), 70% up to USD0.79/kg
(RMB5.1/kg)
-
CJ Group Co., Ltd.: 98% lysine up to
USD1.39/kg (RMB9.0/kg), 70% up to USD0.77/kg (RMB5.0/kg)
-
Meihua Holdings Group Co., Ltd. (Meihua
Bio): 98% lysine up to USD1.27/kg (RMB8.2/kg), 70% up to USD0.77/kg (RMB5.0/kg)
According to CCM's research, leading lysine producers started to hike their
prices up at the end of April. On 28 April, Meihua Bio and Global Bio-chem
quoted 98% lysine at USD1.21/kg (RMB7.8/kg) and USD1.22/kg (RMB7.9/kg)
respectively, and both quoted 70% lysine at USD0.73/kg (RMB4.7/kg). The soaring
price of pork has stimulated the recovery of the breeding industry, which has
allowed leading lysine producers to raise quotations.
As a result, by the end of May, the average market prices of 98.5% lysine and
70% lysine had risen by 3.9% and 11.1% respectively from their April levels.
Prior to these price hikes, in March, given the slack demand for feed and slow
consumption of lysine inventories, downstream enterprises held a
"wait-and-see" attitude, choosing to consume their inventories and
not purchase in large quantities. At that time, most lysine producers mainly
dealt with the orders they received before.
Thus, lysine has gradually transitioned to a buyer's market, showing obvious
sign of a coming plunge in market price.
Moreover, excessive competition hastened the fall in the market price of
lysine. The drop in the price of 70% lysine pulled down that of 98.5% lysine.
As of April, market prices of 70% lysine and 98.5% lysine had fallen by 23.6%
and 15.8% YoY respectively.
Due to the record low market price and low operating rate of plants, lysine is
currently in short supply. So far,
-
CJ (Shenyang) Biotechnology Co., Ltd.: has
not resumed production yet
-
COFCO Bio-chemical (Anhui) Co., Ltd.: is
still relocating its plant from an urban area to an industrial park
-
Global Bio-chem and Shandong Shouguang
Juneng Golden Corn Co., Ltd.: is maintaining a relatively high operating rate
-
Meihua Bio and Ningxia EPPEN Bioengineering
Stock Co., Ltd.: is maintaining a temporarily low operating rate
Monthly market price of lysine in China,
Jan. 2015-May 2016
Source: CCM
The rebound in market price of lysine may
not be very large and may only last a short time, according to analyst CCM.
Downstream demand is the key factor
affecting the market price of lysine.
In 18 May, the Ministry of Environmental
Protection of the People's Republic of China released a draft of the Technical
Guidelines for Delimiting Livestock Breeding Forbidden Area to solicit public
opinion.
The draft offers a list of the areas where pig breeding is forbidden
(as of May 2016), including 154 regions in 11 provinces, namely Shandong
Province, Fujian Province, Hunan Province, Zhejiang Province, Hubei Province,
Guangdong Province, Anhui Province, Henan Province, Guangxi Zhuang Autonomous
Region, Liaoning Province and Yunnan Province.
So far, over 150 counties/regions
nationwide have started the delineation of forbidden breeding areas, Shandong
Province, Fujian Province, Zhejiang Province, Hunan Province and Guangdong
Province in particular. For instance, after rectification, in Nanhu District,
Jiaxing City, Zhejiang Province, the number of live pigs in farm plunged from
1.08 million to 50,000, down 95.37%.
As more small farms close down, both
breeding areas and the number of pigs in farm continue decreasing. Moreover,
the completion and subsequent operation of new farms under construction by
large-scale enterprises is still a long way off. Overall, demand for lysine
from the downstream pig breeding industry will remain slack in the short term.
Thus, despite the fact that lysine
producers have cut production and raised quotations, the rebound in market
price of lysine may only last a short while.
* This article comes from Amino Acids China E-News 1605, CCM
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Tag: lysine breeding