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Global Methionine Prices Surge in January 2024 Amid Supply Chain Disruptions
Global Methionine Prices Surge in January 2024 Amid Supply Chain Disruptions

Global Methionine Prices Surge in January 2024 Amid Supply Chain Disruptions

  • 02-Feb-2024 4:26 PM
  • Journalist: Timothy Greene

Methionine prices experienced an upward trajectory on a global scale throughout January 2024. The surge in demand for Methionine across diverse applications, including animal feed, food additives, and pharmaceuticals, has been a key driver behind this price escalation. Additionally, the rise in costs of crucial raw materials like ammonia and methanol during January contributed to an increase in the overall production expenses, further supporting the upward trend in Methionine prices.

In January 2024, China's manufacturing sector demonstrated signs of recovery, as indicated by a rise in the Purchasing Managers' Index (PMI) to 49.2, surpassing the previous month's figure of 49, as per the data released by the National Bureau of Statistics (NBS). The improvement in January can be attributed to an acceleration in production rates and an increase in new orders. The impending Lunar New Year in February prompted earlier factory closures, leading to heightened demand for various goods, including Methionine, as businesses and consumers engaged in stocking up before the holiday period. This surge in demand strained existing Methionine inventories, consequently exerting upward pressure on prices, not only within China but also impacting other regions dependent on Chinese exports, such as the USA and Europe.

Furthermore, delays or limitations on shipments traversing through the Panama Canal and Suez Canal, crucial transit points for global trade, have disrupted supply chains and resulted in increased shipping and operational costs. In response, manufacturers and traders have been compelled to raise prices further to sustain profitability, thereby contributing to the elevated Methionine prices on a global scale. Additionally, adverse weather conditions in various regions have impeded transportation logistics, including shipping routes and port operations, resulting in shipment delays and the tightening of the global supply. These factors collectively exert upward pressure on Methionine prices.

The most recent report highlights a substantial surge in US consumer confidence to its highest level in two years in January, fuelled by the easing of inflation concerns and the anticipation of forthcoming interest rate cuts by the Federal Reserve. This upswing in consumer confidence translated into increased spending, thereby elevating the demand for Methionine and contributing to a rise in prices. Similarly, Germany witnessed a consecutive second-month improvement in consumer confidence in January, marked by a positive shift in income expectations despite a somewhat muted economic outlook. This sustained positive consumer sentiment in Germany also factors into propelling the upward trajectory of Methionine prices.

 

According to ChemAnalyst analysis, Methionine prices exhibited a fluctuating trajectory throughout 2023, experiencing declines until the third quarter before stabilizing in the fourth quarter. These movements were influenced by various factors including inflationary pressures, trade dynamics, consumer behaviour, and fluctuations in feedstock prices.  Looking ahead to the first quarter of 2024, Methionine prices are anticipated to remain stable, supported by sustained demand from the food and feed grade sectors. However, there might be a slowdown in production, leading to reduced global supply, which would contribute to the overall optimistic conditions in the Methionine market.

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