Critical moment: watershed has appeared or is around the corner in the market

The 127th?Weekly

We predicted multiple times in early November that the watershed for amino and vitamin markets would appear from late November to early December, showing new directions for different products.

1

The 1st?watershed came up for VE. Since mid to late November, VE prices have gone downwards, but the pace has been slowed down from last?week when the manufacturers started correcting delivery plans.

?2

Different market situations and changes have occurred to different amino acid products.

Demand is continuously weakening. Feed processors have replenished their stock in the past two months. From late October to the end of November, some of the feed processor members on mobaobuy.com have already fully prepared for the production before Chinese Luna New Year, with either spot stock or contracts in place. Therefore, their purchase intention has decreased evidently.?

The situation for the manufactures is opposite. Influenced by the price hikes in overseas market and orders increase (orders for Q1 2022 has been on the rise and prices have been picking up), corn prices start increasing although energy and raw material prices have fallen back.

Based on Boyar’s weekly report, corn prices of China market have been bumpy but stronger. Factors including snowing again in some Northeast regions, logistics disruptions and farmers’ cautiousness in selling the crop have slowed down the new corn entering into the market. Dealers have raised purchase prices and replenishment of deep processors also provide support to the prices. This week (week 48) they have been up by?0.04% on weekly basis and 6.85% on yearly basis.?

3

As production cost and market demand change,?markets of 98.5%?L-lysine HCL, 70%?L-lysine sulfate and threonine have seen different?trends.

With the hot sale of 98.5% L-lysine HCL since October coming to an end, downstream has presented much less purchase intension, which is evidenced by the transaction data from mobaobuy.com in the recent two weeks. The price increase by some leading manufacturers will further put off downstream.

Transaction of 70% L-lysine sulfate is in normal pace, with some increase this week (week 48). As 98.5% L-lysine HCL prices keep moving up, the cost performance of these two products have reached a new balance.?

Supply of L-threonine in the past months has been shortened due to the shutdown of one production line by a parge producer. Restricted by its cost, prices of L-threonine have little room to drop. Although it was not as high as that of lysine, the transaction of threonine has been stable till now, which has been evidenced by the transaction data of the last three weeks.

Transaction of methionine has experienced significant fluctuations. Orders decreased drastically earlier, but have bounced back in the last two weeks (driven by rigid demand), and prices have been back to reasonable range.

4

Direction of all products will continue to be clearer. There will be further bargaining games between upstream and downstream in the coming 1-2 weeks. It’ll be different from what happened in March to April this year. The market will continue to see changes in the coming weeks in the consideration of the tight arrangement of delivery, logistics challenges in winter, the direction of corn prices and the impact of the Winter Olympics.?