Methionine Prices Rise Sharply in Germany Amidst Strong Downstream Demand

The prices of Methionine increased significantly in the German market due to restricted supply and a surge in demand from end-user industries. The import of Methionine also slowed down from major exporting countries such as China, which resulted in less supply in the market, leading to an increase in prices. Furthermore, the German Euro depreciated against the USD dollar in August, making imports more expensive in Germany, contributing to a decrease in the supply of Methionine in the German market and keeping prices on the higher side. Methionine is a key amino acid used in a variety of industries, such as pharmaceuticals, beverages, and animal feed. In recent times, there has been an increase in demand from these core markets, which has contributed to the rise in Methionine prices.

China is one of the important trade partners of Germany. In August, China's overall economic performance remained subdued. The manufacturing sector in China contracted for the fifth consecutive month. This led to decreased production and insufficient stock among suppliers and traders. Evonik, one of the leading specialty chemicals companies, has recently announced an increase in the prices of MetAMINO (DL-Methionine 99%, feed grade) in the Asia Pacific region, primarily in China, as a result of the decline in production process due to maintenance and safety reasons. All these factors also impacted the Methionine import from China, which resulted in fewer inventories in the German market, supporting the upward trajectory of prices.

The German economy is currently dealing with significant challenges as its economy grapples with ongoing difficulties. The country is experiencing an energy crisis as a result of the Ukraine war and a lack of alternative energy sources, which is now directly affecting business activity in the economy. The cumulative effects of these issues are further hindering Germany's growth potential. Additionally, the inflation rate remained high, rising by 5.3% year over year in August, which also helped to drive up the cost of Methionine. Aside from that, adverse weather conditions like torrential rain and wildfires hampered suppliers' ability to deliver goods on schedule in Germany, disrupting the supply chain and raising Methionine prices.

According to the ChemAnalyst analysis, a combination of rising end-user industry demand and constrained market supply will cause Methionine prices to increase gradually over the coming months. In addition, it is anticipated that the European Central Bank (ECB) will likely hold off on raising key interest rates in September, which could help to boost overall market demand. Better trading activity is also anticipated, which might help to maintain the favorable market dynamics.