August 19, 2005

 

China Methionine Market Weekly: Prices stabilised after earlier losses; near-term prices to strengthen on positive leads (week ended Aug 19, 2005)

 

An eFeedLink exclusive report
 

 

1.  Price summary

 

Methionine prices in China regained some lost ground at the end of the week ending Aug 19, following initial weakness at the start of the week. Enquiries for sales have increased and market transactions have also picked up slightly. Quotes for dl-methionine were at RMB 20.5-20.8/kg while transacted prices (delivered-to-feed-mill) averaged RMB 20.0-20.5/kg, down by RMB0.2-0.3/kg compared to the previous week.

 

 

2.  Producers' activities

 

During the week in review, one major producer's price quote for dl-methionine remained unchanged at RMB22.0/kg while its resellers were offered prices at above RMB21.0/kg. Another major producer's price quote for China market were raised by RMB0.5/kg to RMB23.0/kg while its quote for liquid methionine were at RMB18.0/kg. Traders of an Asian producer were quoting prices at above RMB21.0/kg to feed millers while its price offer for liquid methionine were close to prevailing market prices.

 

The offer prices issued by a liquid methionine producer to its traders were at RMB19.0/kg, while its MHA 84 percent products were quoted at RMB18.0/kg.

 

 

3.  Global markets

 

During the week in review, the European market had remained firm as the persistently high crude oil prices continue to exert pressure on methionine producers. Deals involving large volumes were concluded at between 1.70-1.80 euro/kg. Feed millers who purchase less than 10 tonnes were offered prices at close to 1.85 euro/kg.

Quotes for liquid methionine stayed in the range of 1.25-1.30 euro/kg.

 

 

4.  Market forecast

 

China's methionine prices recovered from earlier weakness in the past week. Analysts are expecting the following market developments to positively influence methionine prices in the weeks ahead:

• Sales of poultry feed in August have shown significant improvement. Actual market demand for methionine would pick up further as the recovery in poultry production is already well on track.
  
  
• Feed millers' methionine stocks are currently close to depletion following their last round of volume procurement in early July. By late-August or early September, these feed millers are expected to initiate stock replenishment, which would fuel a rise in market demand.
  
  
• Two major methionine producers have raised their price offers to levels substantially higher than prevailing market prices in recent days. Analysts say this would provide a lift for market sentiments and many resellers would certainly ride on this opportunity to raise their offer prices to buyers. The other major producers are expected to follow suit in raising prices if there is any sign of market improvement. The producers are keen to pass on the increased cost of production brought about by the soaring crude oil prices to buyers.

Weekly Transacted Prices of DL-Methionine in China (Week Ended Aug 19, 2005)
US$1 = RMB 8.11
Area	Week 32	Week 33	Price change (RMB/kg)
	Aug 6 - Aug 12   (RMB/kg)	Aug 13 - Aug 19   (RMB/kg)
Guangzhou	20.50	20.30	-0.20
Chengdu	20.50	20.30	-0.20
Jinan	20.30	20.00	-0.30
Nanjing	20.40	20.20	-0.20
Shijiazhuang	20.30	20.00	-0.30
Zhengzhou	20.30	20.00	-0.30
Shenyang	20.60	20.40	-0.20
Beijing	20.30	20.00	-0.30
Weekly Transacted Prices of Liquid Methionine In China (Week Ended Aug 19, 2005)
US$1 = RMB 8.11
Area	Week 32	Week 33	Price change (RMB/kg)
	Aug 6 - Aug 12   (RMB/kg)	Aug 13 - Aug 19   (RMB/kg)
North	16.70	16.80	0.10
Central	16.60	16.70	0.10
South	16.50	16.60	0.10
Prices refer to delivered-to-feedmill prices, and are for reference only.

 

Remarks: "General transacted prices" refer to the prices feed millers purchased their requirements, with the transacted volumes remaining at 2-5 tonnes. The price includes 5 percent Custom duties, 17 percent value-added tax, margins earned by distributors/traders, transport costs in China, and import clearance fees. A price of RMB20.5/kg would translate to CIF US$2.03/kg.

 

 

 

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