CCM: Industry insider gives comments on methionine market

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Publish time: 3rd May, 2018      Source: CCM
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  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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