For the Quarter Ending December 2023
The Methionine market in North America faced challenges during the fourth quarter of 2023, marked by notable factors such as persistent inflation, seasonal variations, and increased interest rates. Prices exhibited a mixed trend throughout the quarter, reflecting the complex dynamics influencing the market.
One of the primary factors influencing the market was the persistent high inflation, which led to increased costs and reduced consumer spending. This resulted in decreased demand for Methionine-containing products in the food and pharmaceutical sectors. Additionally, heightened competition among distributors and suppliers put downward pressure on prices in the food-grade Methionine segment. On the other hand, the demand for Methionine in the animal feed sector remained steady, driven by the continued operations of livestock farms and poultry producers. The winter season also contributed to the positive market sentiment in the feed grade sector, as it prompted an increased demand for feed additives like Methionine to support animal health and growth.
In the United States, Methionine prices experienced a mixed trend during the quarter. Food-grade prices decreased due to reduced consumer spending and increased competition, while feed-grade prices increased due to steady demand from the animal feed sector. The latest price of DL-Methionine Feed grade CFR New York in the USA for the fourth quarter of 2023 is USD 2820/MT.
During the fourth quarter of 2023, the Methionine market in the APAC region exhibited a mixed trend. Initially, prices saw an increase as market participants focused on replenishing their inventories. The surge in Crude oil prices, attributed to the extension of oil production cuts by OPEC+ countries and the Israel-Hamas conflict, resulted in elevated manufacturing costs and subsequently higher Methionine prices. In the middle of the quarter, the food supplement sector showed overall stability, marked by reduced inquiries from both domestic and international markets. However, the feed grade sector experienced an improvement in domestic orders and export sales. By the end of Q4, prices declined, influenced by a decrease in new order inquiries both domestically and internationally. The reduced domestic demand can be attributed to deflationary pressures in China, leading consumers to defer purchases in anticipation of further price declines, consequently impacting overall consumption. In terms of China, the prices of Methionine exhibited a 4% increase from the previous quarter. The market dynamics in China were influenced by the resurgence of its manufacturing sector, strong demand from end-users, and the elevated cost of raw materials. The price of DL-Methionine Feed grade FOB Shanghai in China for the fourth quarter of 2023 was USD 2700/MT.
During the fourth quarter of 2023, the Methionine market in Europe witnessed significant fluctuations, influenced by various factors. Initially, a scarcity of available stock and heightened demand from end-consumers led to a substantial increase in prices. Moreover, elevated energy prices and increased transportation costs further contributed to an upward movement in Methionine prices. Germany, in particular, experienced the most pronounced price changes, driven by a surge in demand across various sectors, resulting in tightened market conditions and price escalations. Additionally, the depreciation of the Euro against the USD added to import costs, exerting upward pressure on prices. Midway through the quarter, Methionine prices exhibited a diverse trend, characterized by varying fluctuations in the food and feed grade sectors. Towards the end of Q4, Methionine prices underwent a downturn, primarily influenced by reduced demand from both the food and feed grade sectors. An important contributing factor was the unexpected decline in German business morale, impacting many retailers and leading to a notable acceleration in the reduction of both sales and new orders, supporting the downward trajectory of Methionine prices. The closing price for the quarter in Germany was USD 2880/MT of DL-Methionine Feed grade CFR Hamburg.
For the Quarter Ending September 2023
The prices of Methionine experienced a notable decrease of 6.47 percent in July, followed by a slight increase of 8.18 percent in August and a modest rise of 5.04 percent in September. In July, new order inquiries and sales decreased as local and worldwide demand remained poor. In July, the Federal Reserve raised its main policy interest rate by a quarter percentage point, the highest level in 22 years, lowering overall demand and supporting the downward trend. Prices grew in August and September, however, as a result of a rise in energy prices, which increased total company expenditures and transportation costs, resulting in an increase in Methionine pricing. As Russia and Saudi Arabia continued dramatic supply cutbacks, gasoline prices increased, pushing crude oil to a 10-month high of $91 per barrel. Furthermore, imports from key exporting nations such as China fell, restricting supply and driving up prices in the US market. Market players prioritized inventory replenishment, which led to the rise in Methionine price. Prices concluded at USD 2710/MT CFR New York at the end of Q3.
The prices of Methionine experienced a notable decrease of 6.93 percent in July, followed by a slight increase of 12.87% in August and a modest rise of 4.00% in September. Methionine prices fell in July as industrial activity slowed and demand from downstream industries declined. The official manufacturing PMI (Purchasing Managers Index) in July was 49.3, indicating that factory activity in China fell for the fourth consecutive month as a result of lower foreign orders and inadequate local demand. Methionine prices grew in August and September due to increased end-consumer demand and limited supply in the market due to the industrial sector's fifth consecutive month of decline. Furthermore, despite economic concerns, China's central bank reduces its main interest rate, which serves to encourage market consumption, resulting in increased Methionine costs in China. In September, China's manufacturing purchasing managers' index (PMI) rose slowly back into the growing zone, revealing the restoration of industrial activity and predicting a positive economic resurgence in the country. Prices concluded at USD 2600/MT FOB Shanghai at the end of Q3.
The prices of Methionine displayed a noteworthy decrease of 6.60 percent in July, followed by a modest increase of 9.64% and 4.69% in the months of August and September, respectively. Methionine prices declined in July due to a slowdown in business activity and a decrease in downstream sector demand. The sharp reduction in goods demand can be attributed to a variety of factors, including customer apprehension, destocking, and rising borrowing rates, as well as tightening market conditions and economic and geopolitical uncertainties. Prices rose in August and September as a result of ongoing inflation, rising interest rates, and the oil crisis. In August, the German inflation rate was +6.1%, as measured by the year-on-year rise in the consumer price index (CPI). Food and energy prices have risen faster than average inflation, adding to high inflation. Prices for energy goods jumped 8.3% year on year, following a 5.7% increase in July. Businesses' spending and operating costs grow as a result of persistently rising inflation, resulting to higher Methionine prices in Germany. Prices concluded at USD 2680/MT CFR Hamburg at the end of Q3.
For the Quarter Ending June 2023
In the United States, the prices of Methionine decreased by 16.57% and 0.83%, respectively, for food grade and feed grade respectively, from April, suggesting prices remained on the weaker side in the second quarter. The factors include increased supply and weaker demand in domestic as well as foreign markets. The PMI (Purchasing Managers' Index) also dropped to 46.3 in June compared to the beginning of the second quarter, explaining decreased purchasing activity from end consumers. Since there is less demand in the market, market participants have reduced the price of Methionine to free up their existing inventory. The cost of energy, which is a major input cost for production, has fallen in recent months due to the slowdown in the global economy coupled with lower oil prices, which further supports Methionine's downward trajectory. Additionally, high-interest rates have reduced demand for Methionine in the US market, driving prices down. Additionally, the US dollar appreciated against the Chinese yuan in June, making US imports cheaper and increasing the availability of Methionine, resulting in lower methionine prices.
In China, the prices of Methionine declined by 16.57% and 0.83% for food grade and feed grade, respectively, from April levels because of the lowering demand in the food and beverage, nutraceutical, and pharmaceutical industries in the second quarter. Their market position remained weak due to an increase in inventories at the beginning of Q2. Reduced offtakes from both domestic and foreign markets contributed to the continuation of the weakening trend. The official manufacturing purchasing managers' index (PMI) dropped to 48.8 in May from 49.2 in April. This suggests that the manufacturing sector has contracted throughout Q2, leading to less production activity because of weakened demand from end sectors. The follow-up for new orders also declined at a faster pace in Q2. Market providers cut down prices in order to clear their inventories and maintain profitability. Apart from that, extreme temperatures in June also hampered the trading activity in the second quarter, increased the supply in the Chinese domestic market, further increasing downward pressure on prices.
The Methionine price in June dropped by 0.79% and 10.71% for feed grade and food grade, respectively, from April levels, indicating prices remain on the weaker side in the second quarter. Factors like low purchasing activity and ample inventories in the German market contributed to this downward trajectory. In Germany, the manufacturing PMI (Purchasing Managers Index) for June 2023 fell to 41 from 43.2 in May and 44.5 in April, indicating a slump in manufacturing due to the impact of the COVID-19 pandemic. Weak end-user demand leads to a faster decline in new orders. As per the Federal Statistical Office, inflation, as measured by the CPI (consumer price index), hit 6.4% in June, up 0.2% from May. The European Central Bank raised interest rates to curb inflation, leading to lower consumer demand. In addition, the appreciation of the Euro against the US dollar in June made imports cheaper and increased the availability of Methionine on the German market. This further put downward pressure on methionine prices.
For the Quarter Ending March 2023
The prices of Methionine in the North American region witnessed depreciating market sentiments throughout the first Quarter of 2023. At the termination of Q1 2023, prices of Methionine were assessed at USD 2775/MT Feed grade CFR New York and USD 4720/MT Food grade CFR New York with an average quarterly decline of 3.25% and 1.71%, respectively. The cost of raw materials declined for both the feed and food grade markets, which had an impact on production costs and, ultimately, on domestic market pricing. The demand for both grades was steady in January, but as February got underway, the market position was significantly impacted by the offtake from both the local and foreign markets. Additionally, since the market participants were left with ample stocks and inventories, this droves them to cut their quotations in order to sell off the existing goods. Additionally, the North American region saw significant reductions in freight and transportation costs, which further accelerated the downward trend.
The prices of Methionine in the Asia Pacific region witnessed mixed market sentiments throughout the first Quarter of 2023. At the termination of Q1 2023, prices of Methionine were assessed at USD 2465/MT Feed grade FOB Shanghai and USD 4465/MT Food grade FOB Shanghai with an average quarterly decline of 2.31% and incline of 0.50%, respectively. For both the feed and food grade markets, the prices of raw materials decreased, which influenced the production cost, and eventually, the prices decreased in the domestic market. The demand for both grades was consistent in January, but with the commencement of February, the offtake from both the domestic and international markets negatively influenced the market situation. Also, as the market players left with enough stocks and stockpiled inventories, this propelled them to lower their quotations to clear out the existing stocks.
The prices of Methionine in the European region witnessed depreciating market sentiments throughout the first Quarter of 2023. At the termination of Q1 2023, prices of Methionine were assessed at USD 2580/MT Feed grade CFR Hamburg and USD 4670/MT Food grade CFR Hamburg with an average quarterly decline of 2.82% and 1.36%, respectively. The cost of raw materials declined for both the feed and food grade markets, which had an impact on production costs and, ultimately, on domestic market pricing. The demand for both grades was steady in January, but as February got underway, the market position was significantly impacted by the offtake from both the local and foreign markets. Additionally, since the market participants were left with ample stocks and inventories, this droves them to cut their quotations in order to sell off the existing goods. Additionally, the European region saw significant reductions in freight and transportation costs, which further accelerated the downward trend.
For the Quarter Ending December 2022
In the North American region, primarily the United States market, the prices of DL-methionine plummeted during the final Quarter of 2022. With the commencement of the fourth quarter, the prices decreased considerably as the demand for both food and feed grade declined. In the fourth quarter of 2022, DL-methionine continued to drop, with CFR New York prices for food and feed grade settling at $4990/MT and $3070/MT, respectively, in December. Enough inventories among the market players and domestic merchants supported the market situation in the fourth quarter of 2022. The prices for food grade improved at the termination of Q4 2022 with the rise in demand from the downstream sector.
The prices of Methionine in the Asia Pacific region, majorly in China, demonstrated mixed market sentiments throughout the last Quarter of 2022. Although, in October, the prices for Methionine inclined significantly following November 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 Methionine on the lower side. With the ending of the fourth quarter, i.e., in December, the prices of Methionine inclined again with a settlement at USD 4410 /MT FOB Shanghai Food Grade.
Following a downward trend over the fourth quarter of 2022, the CFR Hamburg negotiations for Food grade and Feed grade Methionine in Germany were resolved at $4880/MT and $2820/MT, respectively, in the month of December. The on-and-off port restrictions in China made the business climate in Europe worse, together with the unrest in Russia and Ukraine. On the demand front, offtakes in the end-user industries during this quarter ranged from modest to stable. Additionally, this quarter witnessed a continuous lackluster demand from the feed sector. On the contrary, the market situation for food grade improved with a slight rise in the inquiries from the end-user sector.
For the Quarter Ending September 2022
In the third quarter of 2022, demand from North American consumers for DL-methionine continued to drop, with CFR New York prices for food and feed grade settling at $5530/mt and $4057/mt in September. Because of China's zero-covid policy, imports of amino acids, including Methionine, to the US were severely restricted. The heat wave and power shortage forced the shutdown of numerous Chinese production facilities in the second half of Q3, and other companies that make various Amino Acids also went into maintenance, which had a detrimental impact on US trade. Many businesses and industries attributed the nation's declining demand to a variety of issues, such as inflation, supply shortages, and excessive interest rates.
The market trend for DL-methionine in the Asia Pacific region demonstrated a negative tendency, with September values for the food and feed grades settling at $4370/mt and $2850/mt, respectively. Raw material cost volatility, tepid consumer spending, and weak end-user industry demand are a few variables that have contributed to this pricing pattern. Big suppliers held off on placing large orders during the first half due to the sluggish offtakes and weak downstream demand. When the markets resumed operations in the final week of July following the shutdown, some manufacturing facilities, including Vega Pharma, Prumix, and others, were under maintenance, which impacted the product supply for both domestic and foreign suppliers. The market dynamics in China were also severely harmed this quarter by extreme weather and power outages.
Following a downward trend over the third quarter of 2022, the CFR Hamburg negotiations for Food grade and Feed grade Methionine in Germany were resolved at $4870/MT to $3420/MT in September. The on-and-off port restrictions in China made the business climate in Europe worse, together with the unrest in Russia and Ukraine. On the demand front, offtakes in the end-user industries during this quarter ranged from modest to stable. Additionally, this quarter witnessed a lackluster demand from the food and feed sectors.