Amino acid markets: Container freight rates stay high and potential to go higher

Especially in Europe, returning import duties in Q4 are anticipated and in all regions, the container freight costs are weighing relatively heavy on the final lysine price.

FOB China prices for lysine and threonine are stable to weakish. Especially threonine has more potential to decline further. But the container freight rate to Europe and the Americas continues to be firm and still has further upward potential at least throughout the summer, leading to firmer price offers for several amino acids for the remainder of Q3 and Q4. Learn more in this week’s feed additives snapshot (week 23).

Methionine has become slightly weaker recently, but is stabilising at the moment due to container freight impact. Tryptophan and valine are weakish, but any price decline is currently offset by higher freight rates, leading to stable prices bottom line. Arginine is also relatively stable.

In partnership with Feed Additive Prices

Lysine

Prices FOB China are stable to slightly weaker, compared to some weeks ago. In regions like Europe and the USA, the price is increasing. Especially in Europe, returning import duties in Q4 are anticipated and in all regions, the container freight costs are weighing relatively heavy on the final lysine price. The container freight costs have increased significantly on the route from China to Europe and the Americas. Bottom line prices in these regions have the potential to go up further as the freight cost increase is higher than the recent fob China price decline. This has led to higher interest in covering late Q3 and early Q4. New contracts are only being offered ex China for July/August shipment soonest. Q2 is contracted and a good portion of Q3 is as well.

AMINO ACID PRICESHere the market prices of 3 important amino acids are tracked – check it out… — AMINO ACID PRICES
Here the market prices of 3 important amino acids are tracked – check it out…

Threonine

Prices FOB China have been under pressure the last few weeks but have stabilised for now. But more price decline is taken into consideration. Demand has become a bit softer in several regions, while new capacity has come online. However, as container freight rates to several main ports have increased significantly, the local threonine prices have increased for Q3 and early Q4. Buyers have been contracted for Q2 and a good portion of Q3. There is a wait-and-see attitude for longer-term contracts, despite the high container freight prices.

DL-Methionine

Methionine prices have been slightly weaker in most regions, but stabilising again currently, as higher container freight rates compensate for an earlier decline. After a recent period of stable to firmer markets, the momentum to keep prices up is gone, at least for now. There are still messages communicated about production not being fully up to speed and expected upcoming maintenance periods and production optimisation projects, but that does not seem to influence the market. In almost all regions, the market is quiet and contracted forward. Q2 is contracted and several buyers have also contracted a portion of their Q3 needs.

Tryptophan

After a period of relatively stable prices in most regions, except for China where the market was weaker already, prices are softening now in other regions as well. Although currently the weaker tone is compensated by higher container freight rates, which offsets the decline. There is more production capacity allocated to smaller amino acids and more tryptophan is slowly coming on the market this and coming years, exceeding consumption. In local regions, like Europe, where Chinese suppliers do not have authorisations in place yet or can’t supply from Xinjiang origin, the local Western suppliers were able to keep higher prices. Most of Q2 has been contracted by now, but buyers are hesitant to look at Q3 already.

Valine

Valine prices FOB China continue to be weak and there is not a lot of buying interest. But at the same time, the container freight costs are starting to have an impact now also on higher priced amino acids, so the end price in the local regions is actually stable at the moment. Prices in the USA are mostly stable to slightly weak. The market is very quiet at the moment and only small spot buying activity is seen. Q2 is contracted and a portion of Q3 is as well for strategic/continuity reasons.