Lysine Hydrochloride Prices Showcase Pessimistic Market Outlook in the USA and Europe

Europe and the USA's Lysine Hydrochloride prices declined again this month after a large drop in the last month because of a continuous decrease in its downstream demand. Furthermore, higher energy prices, increased inflation, and a rising stock level among market players have all significantly supported the market sentiments of Lysine Hydrochloride in both regions.

Traders and suppliers noticed that European Lysine Hydrochloride prices have fallen, primarily due to rising energy costs which have increased the operation charges of the downstream products, higher inflation rates, and concerns about a European recession. Although domestic participants already carry higher stock levels to meet the region's total demand, the inquiries received were insufficient. Additionally, since the second half of quarter two, Lysine Hydrochloride prices have decreased and are predicted to continue to do so in the coming months.

Moreover, the demand from the export country, primarily from China, has decreased, and the inquiries have been average caused by the Covid outbreaks in China, which had affected the production and the trading momentum within the country positively supports the price trends of Lysine Hydrochloride in Germany. Although, the domestic production cost in the Chinese market continues to remain strong amidst an increase in energy and operating cost, resulting in weaker output rates. Additionally, rising inflation rates have reduced consumer interest in making purchases, significantly lowering downstream product demand and raising inventory levels among market participants in the European region. Overall, this month in Germany, the cost of Lysine Hydrochloride decreased by 9.86 percent.

Likewise, the US market, where the cost of Lysine Hydrochloride dropped by 9.06 percent this month, exhibits a similar pricing attitude. Weak import-export movement, excessive inventories, and weak demand aid this drop tendency.

According to ChemAnalyts, "the prices of Lysine Hydrochloride is expected to follow a similar trend in forthcoming months for both regions. Demand will likely remain on the lower side, and stockpiled inventories might compel market participants to reduce their prices and destock the accumulated stocks."