US Lysine Hydrochloride Prices Show Divergence Trend in November 2023 for Feed and Food-Grade

Following a persistent decline, the feed grade Lysine Hydrochloride prices continued to mimic a pessimistic trend across the global market, including the United States, during November 2023. This decline, affecting various amino acids, including the Lysine Hydrochloride varieties crucial for animal nutrition, has sparked discussions within the industry and raised concerns among stakeholders and traders within the importing regions. On the contrary, the prices for food-grade Lysine Hydrochloride increased compared to a month before.

A confluence of factors was attributed by market experts that further point to the surplus supply of key amino acids. One of which includes the production output of major amino acids, including Lysine Hydrochloride, Methionine, Valine, and others, which has significantly surpassed the overall arrived downstream inquiries from both the local and overseas market, leading to an oversaturated market and, subsequently, a reduction in prices.

Furthermore, China, one of the main participants in the landscape of amino acid production, such as Lysine Hydrochloride, has significantly affected its domestic market. Due to intense competition and a difficult economic climate, the nation's producers of amino acids have increased their efforts to hold onto market share by providing competitive prices. In other words, fierce competition among domestic producers forces businesses to provide lower prices to hold onto their market share. This has caused prices to spiral lower, which influences the world market. This, in turn, has affected feed-grade amino acid prices globally. Due to their heavy reliance on amino acids, including Lysine Hydrochloride, for animal feed formulations, the livestock and poultry sectors suffer because of the price decline. The demand for feed additives has been weak globally since the end of the year owing to swine disease and bird flu, and buyers were substantially de-stocking up their inventories.

Apart from that, international trade dynamics have also played a role in the price decline. Decreased demand from major importing nations such as the US, coupled with trade tensions and economic uncertainties, has contributed to a slowdown in the global trade of feed-grade Lysine Hydrochloride. Also, Export-oriented countries were grappling with reduced orders from overseas markets and a buildup of inventories, further pressuring Lysine Hydrochloride prices to drop.

However, in the meantime, in the food industry, the market experts stated that the downstream consumption of Lysine Hydrochloride surged during the same time within the importing regions. This, in turn, benefited the food industry as merchants could clear their inventories at a higher cost. Also, the rising cost of energy and other input materials resulted in higher production costs. This, in turn, contributed to an overall rise in the prices of Lysine Hydrochloride food grade in November. In the end, as per the ChemAnalayst anticipation, the market participants state that the prices for both feed grade Lysine Hydrochloride would continue to sustain its pessimistic market outlook while food grade amino acid would further drop as Q4 concludes and Q1-2024 commences.