Amino acids markets: Container freight rates continue to soar
FOB China prices for lysine and threonine have stabilised this week, after recent decline. But the container freight rate to Europe and the Americas has been going up strongly and is expected to remain firm at least throughout the summer, leading to firmer price offers for the remainder of Q3 and Q4. Methionine had become slightly weaker recently, but is stabilising at the moment. Tryptophan and valine are weakish, but any price decline is currently offset by higher freight rates. Arginine is relatively stable. Learn more in this week’s feed additives snapshot (week 22).
In partnership with Feed Additive Prices
Lysine
FOB China prices had been coming down in the past 2 weeks and the market had turned quiet. Although this week the prices seem to have stabilised on A FOB China basis. In the regions the price is increasing. 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.
Threonine
Prices FOB China have been under pressure the last few weeks but have stabilised now. Demand has become a bit softer in several regions, while new capacity has come online. But as container freight rates to several main ports have increased significantly, the local prices have increased for Q3 and early Q4. Buyers have been contracting for most of Q2 and a 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 authorizations 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 have been weakening over the past few weeks and prices in the other regions are under pressure as well. But currently, the high container freight rates offset the potential further regional price decline and markets have stabilised bottom line. There is a focus on the production of smaller amino acids and that means more capacity is seen on the market, especially coming from China. Prices in the USA are mostly stable but in China they are weakening. Also, in Europe, new authorizations are expected of Chinese strains. At the same time, Western manufacturers are struggling with the current low market prices and indicate to see no sustainable long-term business model in such a low-priced market. The market is very quiet at the moment and only small spot buying activity is seen. Q2 is contracted, but no real interest for Q3 yet.
