Amino acids markets: Container freight rates soaring

So the balance in those local regions is stable to firmer for Q3 offers. Methionine has become slightly weaker, after a period of relatively stable prices. Tryptophan and valine are weakish, arginine is relatively stable.

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Lysine

Regional differences are seen for lysine. FOB China prices have been coming down in the past 2 weeks and the market has turned quiet. But at the same time, the container freight costs have increased significantly on the route from China to Europe and the Americas. Bottom line prices in these regions have the potential to go up now as the freight cost increase is higher than the fob China price decline. This has led to higher interest in covering late Q3 and early Q4. New contracts are only being offered ex China for July shipment soonest. Q2 is contracted and a good portion of Q3 is as well.

Threonine

Prices FOB China are under pressure and have declined in the past few weeks. Demand has become a bit softer in several regions, while new capacity has come online. But as container freight rates to several main ports have increased significantly, the local prices have remained stable or even looked a bit firmer for Q3 and early Q4. Buyers have been contracting for most of Q2 and a portion of Q3. There is a wait-and-see attitude for longer-term contracts, despite the high container freight prices.

DL-Methionine

Methionine prices have been slightly weaker in most regions. After a period of stable to firmer markets, the momentum to keep prices up is gone, at least for now. There are still messages communicated about production not being fully up to speed and expected upcoming maintenance periods and production optimisation projects, but that does not seem to influence the market. In almost all regions, the market is quiet and contracted forward. Q2 is contracted and several buyers have also contracted a portion of their Q3 needs.

Tryptophan

After a period of relatively stable prices in most regions, except for China where the market was weaker already, prices are softening now in other regions as well. There is more production capacity allocated to smaller amino acids and more tryptophan is slowly coming on the market this and coming years, exceeding consumption. In local regions, like Europe, where Chinese suppliers do not have authorizations in place yet or can’t supply from Xinjiang origin, the local Western suppliers were able to keep higher prices. But it is weakening at the moment. Most of Q2 has been contracted by now, but buyers are hesitant to look at Q3 already.

Valine

Valine prices FOB China have been weakening over the past few weeks and prices in the other regions are under pressure as well. There is a focus on the production of smaller amino acids and that means more capacity is seen on the market, especially coming from China. Prices in the USA are mostly stable but in China and in Europe they are weakening. Also, in Europe, new authorisations are expected of Chinese strains. At the same time, Western manufacturers are struggling with the current low market prices and indicate to see no sustainable long-term business model in such a low-priced market. The market is very quiet at the moment and only small spot buying activity is seen. Q2 is contracted, but no real interest for Q3 yet.