For the Quarter Ending December 2023
The fourth quarter of 2023 witnessed significant fluctuations in the pricing of Threonine in the North American region following a varied downstream consumption while ending the Q4 on a pessimistic note. Throughout October 2023, the prices for both grades owing to reduced downstream consumption coincided with an excessive supply among the market participants.
Additionally, with the e ongoing economic turmoil in the US and the acceleration of global inflation distributors and suppliers do not concentrate on further restocking because the inventories are surplus and need to be consumed first. Moving forward in November, the market experienced sudden increased demand from both domestic and international markets, leading to higher prices. The supply side also remained robust, with factories showing a willingness to increase prices. Also, the congestion at certain US ports particularly led to significant delays in the delivery of goods. This, in turn, increased shipping costs for businesses, which were ultimately passed on to consumers in the form of higher prices. Additionally, the congestion led to a shortage of shipping containers, further exacerbating the problem.
However, as of December 2023 concludes, the prices fell considerably yet again. Several market indicators shed light on the subdued condition of the L-Threonine trade in the USA, as import quotations experienced a temporary halt due to a limited influx of orders from domestic suppliers. Adding to this, domestic suppliers and retailers actively engaged in destocking practices, systematically clearing existing inventories to avoid the accumulation of excess materials as the new year, 2024, began. Shifting the focus to the upstream segment of the market, it is noteworthy that the cost of feed Corn, utilized in the livestock industry, underwent a significant price surge during this period. This increase in costs led to a narrowed spread chart, signalling an adjustment in the pricing dynamics within this particular segment of the market.
The APAC region Threonine market in Q4 2023 witnessed several significant factors supporting the mixed price trajectory for L-threonine. Firstly, as October commenced, both feed and food grades of Threonine in the Chinese market have seen significant price reductions, aligning with the trend observed in other amino acids, particularly Lysine Hydrochloride. This decline in prices can be attributed to heightened production activities in the preceding months, leading to a substantial accumulation of inventories among domestic suppliers and traders.
In response, merchants have been readjusting their market prices for specific amino acids, bringing them back to normal levels from previously inflated rates. While, as we move towards November, the demand for Threonine augmented considerably in the feed and food industries. This was driven by rising orders from overseas and regional markets, as well as the optimistic market sentiment in the livestock sector. In contrast, the supply of Threonine was sufficient to meet the inquiries, with manufacturers maintaining adequate stock levels. Supporting this, the appreciation of the Chinese yuan against the dollar further impacted the market dynamics, raising expenses for importing buyers and traders.
As we approached December 2023, Threonine prices once again experienced a decline, signalling a pessimistic outlook in demand. Additionally, the significant decrease in the prices of essential raw materials, particularly corn, has intensified the discouragement for manufacturers to actively participate in restocking practices. Moreover, against the backdrop of heightened production activity in the previous month, there has been a consequential rise in available stocks among merchants. This surplus, coupled with weakened purchasing sentiments, has strategically compelled merchants to focus on destocking their inventories at reduced prices. While the industry is currently navigating a scenario where prioritizing cost-saving initiatives takes precedence over expansionary efforts, given the prevailing market conditions.
Across the German market, the prices of L-Threonine during the entire fourth quarter of 2024 witnessed an upside-down trajectory. As October unfolded, the pricing dynamics for both grades of Threonine mirrored the trends observed in other importing regions, such as North America.
The European market experienced a decline in Threonine prices, primarily influenced by a reduction in downstream consumption within the end-user industry and weakened consumer confidence. Notably, the animal feed industry emerged as the largest consumer of Threonine in Europe. With diminished consumer purchasing activity, the overall supply levels for both grades in the German spot market were found to be sufficient to fulfil the compiled orders for October. Marking to this further, trade activity within European nations remained subdued, primarily driven by inquiries that had already been received.
Moving into November, a significant uptick in demand for specific amino acids, including Threonine, was observed, particularly from both the feed and food sectors. This surge in demand was further accentuated by a considerable number of recent factory shipments experiencing delays until mid-November 2023, attributed to the Panama Canal drought. This event disrupted the smooth flow of consignments, leading to rerouting activities and causing an imbalance in the supply-demand outlook, resulting in an higher transportation costs. Furthermore, the anticipation of the holiday season prompted stockpiling activities, with food manufacturers and distributors intensifying their acquisitions of food-grade Threonine to ensure ample inventory levels.
However, concluding Q4 in December 2023, prices for L-Threonine experienced another decline, marking the end of the fourth quarter on a pessimistic note. Recent insights from market experts suggest that this price drop was a strategic move by suppliers to clear their inventories before the year's end. Merchants had previously stocked up substantial inventories in anticipation of potential future price surges. Additionally, within the regional market, domestic consumers and buyers were observed making purchases based on immediate minimum requirements, indicating a conservative stance in response to the prevailing market conditions.
For the Quarter Ending September 2023
Considering the market dynamics in the third quarter, L-Threonine prices exhibited a significant decline in the food sector while witnessing a positive trend in the feed industry. In the initial months of the third quarter, the prices of L-Threonine for feed grade decreased, but they appreciated steadily in September, settling at $ 2000/MT for feed grade. The market remained throughout this quarter as arriving inquiries within the region were successfully facilitated by merchants with sufficient stockpiles, thus stabilizing the market's purchasing activity. While on the other side, the prices dropped notably in July for food grade, mainly due to a consistent decrease in consumption within the food industry. This decline was further exacerbated by economic uncertainties in the US and the global inflation rate, reducing the purchasing power downstream and leading to decreased L-Threonine prices. According to the data, the US trading activity shrank in July as businesses cut staff and output in response to a slowdown in new orders. Given that China is the country of origin for the great majority of pharmaceutical, nutraceuticals, and amino acids products imported into the United States, American companies are making great efforts to reduce their reliance on Chinese suppliers. Nevertheless, China's exports to the US fell by over 25% in the first half of 2023. Even though China's economy has given us additional reasons to be concerned about global growth, the dollar has recently declined. While moving into August, there was a stable rebound in prices compared to the previous month. Although the new demand for L-threonine was not exceptionally strong, the slight increase in demand allowed merchants to raise prices and clear their existing inventories. Improved consumption in the food, pharmaceuticals, nutraceutical, and other industrial sectors supported the rising trend until September 2023 with a $ 2280/MT price settlement.
The cost of feed grade L-Threonine experienced a sharp decline at the beginning of Q3 and showed a modest increase in August and September 2023. This drop was primarily due to a decrease in consumption, leading to excess stockpiles among merchants. Additionally, China's Consumer Price Index (CPI) fell by 0.20% in June 2023, impacting exports, especially in amino acids, with reduced overseas inquiries. This resulted in sluggish trade and higher stockpiles at ports. However, prices saw a slight improvement by August, continuing the upward trend until the end of September. This increase was driven by a rise in demand from end-users, balancing the overall supply-demand equation. On the other side, In the food sector, L-Threonine prices experienced a significant drop throughout July while improving in succeeding months. Several factors contributed to this, including reduced demand due to changing consumer preferences and economic downturns. Persistent declines in overseas inquiries kept production costs low, prompting suppliers to lower prices to stay competitive. However, In August 2023, prices rebounded slightly, which was balanced by market retailers and suppliers. Exchange rate fluctuations, particularly the weakening of the Yuan against the US dollar, led to higher costs for exported materials, contributing to the increase in L-Threonine prices. Consequently, by September 2023, the L-Threonine feed and food grade prices were set at $1550/MT and $2060/MT, respectively.
Across the European market, primarily the German market, followed the market trajectory of the United States and witnessed an ascending price trend throughout the third quarter of 2023. Prices in both the food and feed grade sectors experienced a sharp decline in July, but they improved as the third quarter progressed. One of the contributing factors to this decline was the weakened purchasing activity within the domestic market, leading to fewer inquiries from both suppliers and retailers. With the onset of the monsoon season, buyers were cautious about placing large orders due to the increased risk of product damage, which halted restocking efforts. Moving into August, prices began to stabilize, and suppliers showed eagerness to offer their products at higher prices to compensate for their previous losses in profits. However, buyers remained cautious, waiting to see if prices would further decrease. Additionally, the rising cost of fuel and surging energy expenses increased manufacturing costs in exporting nations. This, in turn, supported higher prices for imported goods in Germany. Furthermore, the Consumer Price Index (CPI) showed an optimistic trend in Germany, increasing to 117.80 points in September from 117.50 points in August 2023. Despite a consistent rise in new orders, albeit lower than what market participants had anticipated in both sectors, L-Threonine prices were set at $2230/MT for food grade and $1900/MT for feed grade.
For the Quarter Ending June 2023
All through the second quarter of 2023, the prices of Threonine for both grades followed the market trend of the APAC region. Overall, the prices for Feed grade improved during the second quarter. This price trend was reinforced by higher downstream demand and overseas inquiries. Additionally, Retailers across the domestic market initially had sufficient inventory to meet the overall surge in demand during April. 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 Threonine across the United States at the end of the second quarter. On the contrary, the prices of Threonine for food grade demonstrate an overall decremented trend during the second quarter, but with a nominal increase in its prices during May. 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. However, moving towards the termination of the second quarter, the prices of Threonine dropped considerably, which was mainly due to weak domestic demand. Furthermore, due to seasonal changes in the availability of Threonine in powdered form, the market participants concentrated on destocking their large stocks, which kept the market on the feeble side.
The prices of Threonine for both feed and food grade represented an opposite market trend across the Asia Pacific region in the second quarter of 2023. Feed-grade prices followed a continuous upward market trend, while the food grade threonine prices declined with a slight increase in May. Feed-grade threonine throughout the second quarter demonstrated a positive market trend further supported by higher downstream demand and overseas inquiries coupled with insufficient stockpiles among the merchants. 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 until the final weeks of June. Unlike feed grade, the market for Food grade threonine decreased in April due to low end-user demand and inquiries from overseas markets. However, in May, prices improved to a certain extent, and overall demand remained stable with sufficient supply among the retailers and suppliers. As June ends, in China, Threonine prices for food grade dropped considerably during June and are projected to remain weak in the upcoming 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 Threonine, in the domestic and foreign markets. As a result, merchants focused on destocking their excess inventories of food grade.
Throughout Q2 2023, Threonine values mimicked the market trajectory of Asia Pacific throughout the European market. Feed grade prices remained Northside throughout Q2. The increase in prices was mainly due to improved downstream demand but balanced with overall stockpiles among the merchants throughout April. As the month progressed into May, feed-grade prices continued to depict a positive market outlook which compelled the merchants to raise their inventories to meet the surging demand. 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 Threonine in the European market throughout the month of May. Compared to feed grade, food grade prices of Threonine showed a weaker market trend throughout the 2nd quarter, with a slight improvement in May. At the start of the 2nd quarter, Threonine prices for food decreased for food grade due to increasing domestic supplies, decreasing consumer confidence, and declining end-user industry consumption. In May, prices improved slightly due to a slight rise in domestic inquiries, which was in line with overall supplies reported among domestic merchants. Once again, towards the end of the 2nd quarter of 2023, food-grade prices decreased significantly due to weak demand and higher stock levels.
For the Quarter Ending March 2023
The market of Threonine ended the first quarter of 2023 on a bearish note. In Early January, prices displayed an incremented trend which was reinforced by an increase in its downstream demand from the end-user sector. Additionally, Positive market sentiments were influenced by limited supply among the suppliers and traders. Also, after a protracted comprehensive labor shortage, companies in the United States increased employment in January. Wages increased, and an increase in the flow of trade, along with the elimination of the zero-covid barrier, further facilitated commerce across the globe which positively supported the market trend of Threonine until the end of February 2023. Moreover, towards the termination of Q1, the markets in the U.S. bettered to some extent; however, the demand from various sectors declined, owing to which domestic retailers focused on destocking their piled-up stocks. Overall, the prices for Threonine were assembled at USD 1670/MT for Feed grade and USD 2820/MT for food grade in the United States.
In the APAC region, Threonine prices witness a decrement throughout the first quarter of 2023. During the first half of the first quarter, i.e., in January 2023, the prices of Threonine in the Chinese market witnessed upsurged pricing sentiments on account of healthy downstream demand from the domestic market. Additionally, limited supply among suppliers and merchants and new product initiatives to meet anticipated demand supported the market sentiments of Threonine in China in January. However, the increase in container logistics indicates that the downward trend has finally come to a halt, which is promising for many players who export to foreign markets as the production started to rise considerably until the end of February. Towards the termination of Q1, the prices of L-Threonine for both the feed and food grade in the Chinese market decreased on account of weaker offtakes from the local market and inquiries from the international market because of which the businesses did not fully resume production, and there was a large stockpile of various downstream product including L-Threonine. With this, the prices of Threonine in China were recorded at USD 2540/MT for Feed Grade and USD 1230/MT for Food Grade in China.
In Europe, the price for Threonine tumbled as the first quarter of 2023 concludes. A decline in demand from the end-user industry, weaker consumer confidence, and higher supplies were some of the factors that kept the prices of Threonine in the southward direction. During January 2023, the cost of Threonine illustrated an inclined price trajectory after witnessing a month-over-month decremented trend. Altogether, ease in inflation, logistic charges, energy cost, and a rise in customer demand within the domestic market supported this market trend of Threonine in Germany. As February drew near, Germany's falling freight and rising energy prices supported the imports of various amino acids, including Threonine from Asia. Also, because shipping volumes have declined and market participants in Europe are coping with an excess of supply, consistently improved consumer demand has boosted the German market for all the commodities. Moreover, as March drew near, the prices of Threonine for both grades went down drastically on account of a considerable drop in its downstream inquiries, which resulted in higher supplies among the domestic merchants. With this, the prices for Threonine were settled at USD 1550/MT for Feed grade and USD 2750/MT for Food grade in Germany.
For the Quarter Ending December 2022
North American region, primarily the United States market, displayed decremented pricing sentiments for Threonine during the final Quarter of 2022. At the start of the fourth quarter, the prices declined considerably as the demand remained dormant for food and feed grades. Market players keep a close eye on various factors that have impacted the market of almost all commodities, including Threonine. Further, no significant changes in the trend were observed throughout the end of the fourth quarter as fewer inquiries kept the inventories on the upper end among the market players for Threonine. Following December, Threonine's cost was estimated at USD 3270/ MT CFR New York.
The prices of Threonine in the Asia Pacific region, majorly in China, demonstrated a mixed market sentiment during the last Quarter of 2022. Government data showed the official manufacturing Purchasing Managers Index (PMI) fell to 48.0 in November, slipping well below last month's reading of 49.2 as steadily rising COVID-19 cases in the fourth quarter, which in turn further affected the market sentiments of all the commodities, including Threonine. Although, in October, the prices for Threonine inclined significantly on the back of an increase in its inquiries within the domestic market. With the ending of the fourth quarter, i.e., in December, the prices of Threonine inclined again with a settlement at USD 2875 /MT FOB Shanghai.
During the fourth quarter of 2022, the prices of Threonine showed ascending market sentiments in the European region. With the start of October, a continuous decremented trend for Threonine was observed within the region because of the decrease in end-user demand. Following November, the prices remained lower due to a decline in international orders, notably from exporting nations like China, and demand decreased from the previous month. However, towards the end of this fourth quarter, the prices increased, balanced with the overall stocks among the market players. With this, the cost of Threonine witnessed during q4 was recorded at USD 3150 CFR Hamburg in Germany.
For the Quarter Ending September 2022
The market trend for Threonine fell in the third quarter of 2022, with CFR New York prices for food grade falling from $3650/mt to $3072/mt and feed grade descending from $1530/mt to $1290/mt from July to September. Threonine was one of many amino acids whose imports into the US were severely constrained as a result of China's zero-tolerance policy. Numerous Chinese manufacturing facilities were forced to close in the second half of Q3 because of the heat wave and a power constraint, which had a negative effect on US commerce. Many companies and experts blamed the United States diminishing demand on a variety of problems, including inflation, supply shortages, and the nation's high-interest rates.
The market trend for Threonine across the Asia Pacific region exhibited a negative tendency in China, where FOB Shanghai values for Food grade fell from $2400/mt to $2020/mt, and feed grade values fell from $1530/mt to $1290/mt from July to September. Numerous factors, such as shifting raw material costs, subdued consumer spending, and weak end-user sector demand, had an impact on pricing. Big suppliers put off placing sizable orders in the first half due to poor offtakes and weak downstream demand. When the markets reopened in the final week of July, a number of production plants, including Vega Pharma, Prumix, and others, were undergoing maintenance as a result of the outage. This affected the product flow for domestic and international suppliers during H2 of quarter 3. Extreme weather and economic factors have also negatively impacted the market dynamics in China this quarter of 2022.
The CFR Hamburg negotiations for both food and feed grades in the domestic German market showed a downward trend after the values declined from $3100/mt and $2330/mt to $2600/mt to $1864/mt in September, continuing a downward trend throughout the quarter. The already difficult economic climate in Europe was made much more difficult by the unrest in Russia and Ukraine and the on-and-off port restrictions in China. Furthermore, the food and feed industries had a sluggish demand along with low to stable offtakes.