August 15, 2003
China Methionine Market Weekly Report - Marginal Slide in Methionine Prices in China (August 15, 2003)
An eFeedLink Exclusive Report
During the week ended August 15, methionine prices in China continued to weaken with marginal slides, after two weeks of relative stability.
Current market prices of powder methionine are around RMB 24.2-24.5 /kg.
In seven major regions, average transacted prices of powder methionine (delivered to feed mill) were at around RMB 23.8-24.0 /kg, down by RMB 0.2 /kg over last week's prices.
Market prices of liquid methionine remained largely stable, with prices in the southern region sliding marginally by RMB 0.2 /kg over last week's, to RMB 20.5 /kg currently. Generally, transacted prices stayed at around RMB 20.2-20.3 /kg, with some at RMB 20.0 /kg in certain areas.
During the week, after some market anticipation, a major methionine producer finally quoted its latest offer price at USD2.4 /kg, equivalent to approximately RMB 24.8 /kg, which is way above current market prices. In effect, compared to the previous offer price of USD 2.5 /kg quoted by the same company, the latest offer price has been lowered. Still, Chinese importers are unlikely to find the price favorable.
During this week, market demand for methionine continued to weaken, on account of the following:
The relatively low inventory level of poultry kept in most regions during the current warm season, when the stock of hens are normally reduced;
The level of poultry production this year, following China's recovery from SARS, is lower than that of the same period last year;
China's export of poultry meat is still low, and has not fully recovered from the damaging effects of SARS;
The general fall in market prices of methionine has a negative effect on buyers' desire to purchase, thereby dampening market demand.
Under the current state of weak market demand with ample supply, coupled with methionine producers and traders under the pressure to release their stocks into the market, marginal slides in methionine prices can be considered quite normal. While the recent rise in market competition may have pressure on prices to move lower, the continually high offer prices quoted by producers and the relatively high selling costs incurred by suppliers are likely to prevent sharp falls in methionine prices, at least in the near term.