August 29, 2003
China Methionine Market Weekly Report - Methionine
Prices in China Stop Sliding and Are Seen to Rise (August
An eFeedLink Exclusive Report
Methionine market in china for the week ended August 29th remained essentially stable. Market prices fell slightly during early part of the week, but showed signs of recovering to stability toward end of the week.
Quotations and transacted prices in some regions have risen slightly. Current quotations for powder methionine ranged between RMB24.0-24.5/kg, while general transacted prices (delivered-to-factory prices) for the regions listed in the table below were averaged between RMB23.7-24.0/kg, of which the prices in Jinan and Zhengzhou areas have risen RMB0.2/kg and RMB0.1/kg respectively, compared with the previous week. It is rare for any transactions to be made below RMB23.8/kg.
Liquid methionine prices remained basically steady. Current quotations still remained at around RMB20.5/kg, while general transacted prices hovered at around RMB20.0-20.2/kg, almost the same as the previous week. Transacted prices for large volume in some regions were still below RMB20.0/kg.
As expected by some traders, market prices are seen stabilizing, despite the abundant supply. Generally, except marginal price hikes in some regions, market prices mostly still remained stable, and transactions continued to be inactive.
However, many traders noted that feed millers in some regions are about to get active in their procurement; they foresee orders to replenish methionine inventories would increase suddenly. The stability in market prices this week may work to urge traders to stock up inventories for the increase in demand from feed millers.
According to trade participants, the reasons for the anticipated higher demand for methionine are as follows:
News circulating regarding the intention of producers to increase asking prices is perhaps the reason that stimulates feed millers' desires to increase their inventories. It was reported that some distributors and traders stopped issuing quotations, and some even raised their asking prices due to the long-term losses they have so far suffered. This has helped put a brake to sliding prices, and had indirectly invigorated market demand;
After Japan lifted its ban on imported chicken from China, as well as the recent price hikes of egg and chicken, trade participants are confident of the improved prospects for the methionine market. The approaching Mid-Autumn Festival and China's National Day celebrations are also likely to cause seasonal price hikes for poultry products. These factors have urged feed millers to replenish their methionine inventories in anticipation of better demand for poultry feed.
As China is totally reliant on imports for its methionine requirements, market situation depends on an interplay of supply and demand coupled with certain influence from sales strategies and distribution plans of the five foreign methionine producers. Many traders felt that prices are not likely to change significantly in the near term if there is no major sales initiative by any of the foreign producers. Nevertheless, prices may rise marginally due to higher demand and some speculative activity of the traders.