September 5, 2003
China Methionine Market Weekly Report - Significant Increases Seen in China's Methionine Quoted Prices (September 5, 2003)
An eFeedLink Exclusive Report
I. Summary of Methionine Prices in China
Quotations for methionine in China for the week ended September 5 increased significantly, with a marginal rise in transacted prices amidst market stability. Recent quotations for powder methionine hovered at around RMB24.5-25.0/kg; rose by RMB0.5/kg over last week's prices. The general transacted prices (delivered-to-factory prices) for the eight regions listed in the table below ranged between RMB24.0-24.3/kg, of which the prices in Beijing and Zhengzhou areas rose by RMB0.4/kg over last week's prices; Guangzhou's prices increased by RMB0.3/kg over last week's prices; the prices in other areas grew by RMB0.2/kg over last week's prices.
Liquid methionine prices also up swung marginally. Current quotations averaged between RMB20.5-21.0/kg, with general transacted prices hovered at around RMB20.2-20.5/kg. Compare with other regions, prices in southern areas were relatively high, staying at RMB20.5/kg; rose by RMB0.3/kg over last week's prices. Meanwhile, prices in northern and central areas remained at RMB20.2/kg, with transacted prices at RMB20.0/kg for large volume in some regions.
II. Producers Activity
Methionine supply by Novus remained stable, with selling prices at RMB20.0/kg. Degussa's stockpile decreased recently; its current CIF US-dollar denominated quoted prices remained at US$2.4/kg. It was reported that Degussa would increase its US-dollar quoted prices for methionine in the near future. Meanwhile, current US-dollar quoted prices (L/C at sight) for methionine from Japan's Sumitomo Chemical are at US$2.38/kg; rose by US$0.03/kg over last quoted prices.
III. Market Analysis
Recent methionine prices in China increased marginally as traders raised their asking prices. Price increases were evident across most regions. According to traders, the upsurge in demand for poultry and egg feed was the main driver for the higher demand for methionine. And the methionine price hikes were caused by the higher quotations asked by traders due to the long-term losses they have so far suffered. As prices are seen to rise, there was impetus for most feed millers to stock up inventories at the going prices.
Prices are likely to rise further for the nearby term due to higher demand and the "push-effect" by traders to regain losses suffered. However, market participants see limited space for further price hikes to sustain. Abundant supply in China is seen as the hurdle to a sustained price hike for methionine in China.