For the Quarter Ending June 2023
North America
All through the second quarter of 2023, the prices of L-Lysine Hydrochloride for both grades indicated a conflicting price trajectory. Overall, the prices for Feed grade improved during the second quarter but witnessed a steep decline in early April following the market trend of March. This price trend was reinforced by a consistent drop in domestic demand and overseas inquiries. Additionally, Retailers across the domestic market were left with bloated warehouse inventory that they ordered in prior months during the epidemic in response to the surge in demand. Moreover, moving toward the middle of Q2, the prices for Lysine Hydrochloride for feed grade started to improve and continued its upward price trajectory until the end of June. In response to a surge in the demand side, the merchants that possessed higher stockpiles among them now destocked their inventories at a price higher than anticipated to cope with their previous profit losses. Apart from that, the US Consumer Price Index (CPI) increased by 0.1 from May to June, according to Statistics, further supporting the positive market trend for L-Lysine Hydrochloride across the United States. On the contrary, the prices of L-Hydrochloride for food grade demonstrate an overall decremented trend during the second quarter but with a minimal incremented trend in May. With a consistent decrease in domestic inquiries, L-Lysine Hydrochloride prices for food continued to be on the south side. However, In May, the demand from the domestic market from the downstream food industry improved somewhat, which was in line with the overall availability of supply among the suppliers. Energy costs, which are one of the main input costs for production, have been decreasing in recent months due to the slowdown of the global economy and the decrease in the price of crude oil, further contributed to the downward trajectory of L- Lysine hydrochloride prices in June. Due to seasonal changes in the availability of Lysine Hydrochloride in powdered form, the market participants concentrated on destocking their large stocks, which kept the market weak.
Asia Pacific
The prices of L-Lysine Hydrochloride for both feed and food grade depicted a varied market trend across the Asia Pacific region in the second quarter of 2023. With prices sustaining a steady market trend for Feed grade, the cost of food grade L-Lysine Hydrochloride went down by 6 percent. In April, the values of L-Lysine Hydrochloride declined sharply, which was supported by lower demand and lessened offtakes forecasted from both the domestic and international markets. Also, the domestic factories had weak demand, the pressure on the upstream shipment was high, and inventory continued to be high, resulting in a continuous decline in the L-Lysine Hydrochloride market. Moreover, moving towards the second half of Q2, the prices started to recover for feed grade and remained augmented until the final weeks of June. As demand from the downstream animal feed sector rebounded, the market participants started to destock their stockpiles first. Also in May, China's purchasing managers' index (PMI) for manufacturing increased from 49.5 in April to 50.9 in May 2023, surpassing market estimates of 50.3. According to the reading, China's manufacturing industry grew for the fifth straight month in May, further supporting the optimistic market trend for feed grade. Contradictory to feed grade, the market of Food grade L-Lysine Hydrochloride witnessed a consistent drop as that of feed grade in the month of April on account of sluggish end-user demand and inquiries from overseas markets. However, the prices improved to some extent in May, and the overall demand was balanced with sufficient supplies among the merchants. As June concludes, In China, the prices of Lysine Hydrochloride show an increase in feed grade prices and are expected to increase in the coming months at a healthy pace compared to the previous months. This is mainly due to the announcement of EPPEN on June 8th, 2023, that it will close its bases in Heilongjiang, and Inner Mongolia, respectively, in June and July for equipment maintenance. This impacted the overall availability of a variety of end-products, including Lysine hydrochloride, in the domestic and foreign markets. As a result, merchants focused on destocking their excess inventories of food grade as demand toned down on the south side, while increased demand from feed sectors led to decreased availability for feed grade, resulting in a significant increase in its prices.
Europe
All over the second quarter of 2023, the values of L-Lysine Hydrochloride mirrored the market trend of the Asia Pacific region across the European market. The prices for feed grade continued to remain on the south side during the month of April while inclined as the month approached. April's drop in prices was attributed to a consistent decline in domestic demand leading to a significant decrease in import activities throughout April. Additionally, the market participants were left with higher inventories for this month which balanced the overall demand side for L-Lysine Hydrochloride throughout the month of April. Moreover, moving towards May, the price started to surge at a moderate level resulting in increased domestic inquiries, and this price trend continued to depict a similar market trend until the final weeks of June. Additionally, the Consumer Price Index in Germany, according to data released by the Federal Statistical Office (Destatis), increased by 6.1% in May 2023 compared to a year earlier, which further supported the upsurged market trend for L-Lysine Hydrochloride in the European market throughout the month of May. In comparison to feed grade, the prices for food grade L-Lysine Hydrochloride displayed a weaker market trajectory throughout the second quarter, with slight improvement during the month of May. At the beginning of the second quarter, the prices for L-Lysine Hydrochloride declined for food grade, which was supported by surging domestic supplies, declining consumer confidence, and falling end-user industry consumption. However, during May, the prices improved owing to a slight increase in the domestic inquiry, which was balanced with overall supplies presented among the domestic merchants. Again, towards the termination of Q2-2023, the prices for food grade decreased significantly owing to feeble demand and higher stockpiles.
For the Quarter Ending March 2023
North America
The first quarter of 2023 saw a decline in the market for Lysine Hydrochloride. Early in January, prices showed an upward trend for both the grades feed and food grade that was strengthened by an uptick in downstream demand from the end-user sector. Positive market sentiments were also impacted by the suppliers' and merchants' low supplies. Additionally, following a protracted global labor shortage, businesses in the United States increased employment in January, wages rose, and trade flow increased along with the removal of the zero-covid barrier, further facilitating global trade and positively supporting the market trend for Lysine Hydrochloride. Additionally, when mid-Q1 ended, although the U.S. markets improved to some extent, demand from different sectors started to decline on a bullish note and continued to follow this trend until March, owing to which domestic retailers focused on destocking their piled-up stocks. Overall, the prices for Lysine Hydrochloride were assembled at USD 1620/MT for Feed grade and USD 3250/MT for food grade in the United States.
Asia Pacific
Prices for lysine hydrochloride demonstrate a mixed trend in the APAC area during the first quarter of 2023. In January 2023, because of healthy downstream demand from the domestic market, the price of lysine hydrochloride in the Chinese market saw a consistent rise as compared to December. Restricted supply among suppliers and merchants and new manufacturing activities to fulfill expected demand kept the market sentiments for both feed and food grade on the upper side. In the latter weeks of January, weaker inquiries from the international market prevented businesses from fully restarting production, leading to an increase in stockpiles and shipments at the ports. With this, the prices of L-Lysine Hydrochloride for both the feed and food grade in the Chinese market decreased in February but inclined again as Q1 came to an end. As a result, overall, the market sentiments remained balanced, and the prices in China were reported at USD 1250/MT for feed Grade and USD 2740/MT for Food Grade.
Europe
As the first quarter of 2023 ends, the cost of Lysine Hydrochloride dropped for feed grade in Europe while showcasing a mixed market trend for Food grade. Increasing supplies, declining consumer confidence, and falling end-user industry demand were some of the factors that kept Lysine Hydrochloride prices in a downward direction in early January for feed grade, while for food grade, the prices remained on the upper side, propelling the merchants to focus on raising their stock levels. Overall, the market trend for Lysine Hydrochloride in Germany was supported by lower logistic costs, lower energy costs, and rising consumer demand. As February approaches, Germany's imports of various amino acids, including Lysine Hydrochloride from Asia, were aided by a drop in domestic inquiries and weak trade momentum for both grades. Towards the termination of Q1-2023, the prices for feed grade remained weak while for food grade surged moderately, backed by the overall supplies. With this, the prices for Lysine Hydrochloride were settled at USD 1540/MT for Feed grade and USD 2990/MT for Food grade in Germany.
In the North American region, primarily the United States market, the prices of Lysine Hydrochloride plummeted during the final Quarter of 2022. With the start of the fourth quarter, the prices increased considerably as the demand for both food and feed grade inclined. Further, the prices witnessed an increment during the first half of the fourth quarter due to rising inflation, numerous logistic issues, and higher manufacturing cost in the export country. Further, following the mid-q4, the prices started to decline gradually due to fewer inquiries which kept the inventories on the upper end later in December. With this, the cost of Lysine Hydrochloride witnessed was assembled at USD 3390/ MT CFR New York food Grade.
The prices of Lysine Hydrochloride in the Asia Pacific region, majorly in China, demonstrated a mixed market sentiment throughout the last Quarter of 2022. Although, in October, the prices for Lysine Hydrochloride inclined significantly following November, the official Manufacturing Purchasing Managers Index (PMI) fell to 48.0 in November, slipping well below last month’s reading of 49.2 along with reducing inquiries kept the prices of Lysine Hydrochloride on the lower side. With the ending of the fourth quarter, i.e., in December, the prices of Lysine Hydrochloride inclined again with a settlement at USD 2750 /MT FOB Shanghai Food Grade.
During the fourth Quarter of 2022, the prices of Lysine Hydrochloride showed descending market sentiments in the European region. At the start of October, the price trend for Lysine Hydrochloride was observed on the upper side on the back of soaring energy costs and disrupted trade activities. Following November, the prices started to decline gradually, primarily due to a decline in international orders, notably from exporting nations from China. However, towards the end of this fourth quarter, the prices followed the trend of November on the back of lesser or no inquiries because of a temporary market closure. With this, the cost of Lysine Hydrochloride witnessed during q4 was recorded at USD 3060 CFR Hamburg in Germany for Food Grade.
