September 23, 2003



Continual Upswing Seen in China's Lysine Prices


An eFeedLink Exclusive Report


Lysine market in China on Monday and Tuesday this week is buzzed with activity, with prices rising to a great extent. Current transacted prices for imported lysine ranged between RMB26-28/kg, while transacted prices in Chengdu city of Sichuan province hitting a high of RMB30/kg. This is beyond most market participants' imagination.


Prices for locally produced lysine has reached the same price level of imported lysine's, with transacted prices hovered at around RMB25-26/kg.


Despite the soaring prices, there were active purchasing activity due to severe tightness in supply. As many feed millers are having difficulty in filling their requirements, they are willing to buy at the asking prices when there is supply available. However, volume of each transaction remained relatively small; a 10-ton transaction is considered a big deal.


Currently, the lysine output by Changchun's Da Cheng still have not resumed its normal level, with only small production to fulfill outstanding contracts. As a result, Da Cheng's production does not relieve the supply tightness in the market.


In addition, there was news circulating in the market that the lysine supply by BASF, which is supposed to arrive in end September, might have been delayed by a recent powerful typhoon descending on South Korea. This has further intensified the shortfall of lysine supply in China. Accordingly, the depletion of lysine supply in China will not be alleviated in the short term, and thus prices are likely to continue moving north for the nearby term.