For the Quarter Ending September 2024
North America
In Q3 2024, the Lysine Hydrochloride market in North America witnessed a period of mixed trajectory concerning both feed and food grade. The prices With respect to the feed grade witnessed an overall upward trajectory while that of food grade demonstrated a downward trend.
Concerning the feed grade side, until August the market remained optimistic with the demand side considerably outspacing the supply side. The rise in the prices was a result of the persistent arrival of regional quotations with market transactions occurring at a higher rate. Further supported by the plant maintenance and limited availability of key feedstock continued to keep the overall production cost on the northerly side, thereby supporting the higher import prices for Feed grade threonine. However, as the quarter moves towards the termination the prices dropped steadily within the region. This decrease in the prices was a result of overall inventories accumulated by the trades in the past month and quarter-end-destocking sentiments, making the trades clear their stocked-up inventories and prepare for the new quarter. On the other hand, with respect to the food grade side, the prices for the entire quarter demonstrated a pessimistic trajectory with a modest rise witnessed at the beginning and the end of the quarter. This significant drop in the middle of the quarter was, influenced by several key factors. The decreased prices were primarily driven by a combination of factors such as lower production costs in major manufacturing countries and weakened demand in the region. Downstream buyers adopted a cautious approach, resulting in limited purchases and a surplus of inventory in the market. The persistent rise in corn prices further impacted production costs, leading to heightened competition and a downward trend in prices.
As a result, the USA experienced the most significant price changes, the market reflected a mixed sentiment with an upside-down price for both grades. The quarter saw a correlation between mixed demand, ample supply, and competitive pricing strategies. Overall, the quarter-ending price for food and feed grade Lysine Hydrochloride witnessed a rise and drop of nearly 9 and 4 percent respectively when compared to the previous quarter of the year.
APAC
Throughout Q3 2024, Lysine Hydrochloride prices in the APAC region remained elevated for both feed- and food-grade products, driven by a stable supply-demand equilibrium. Feed-grade Lysine Hydrochloride prices were sustained by steady production rates, strategic inventory management, and prudent procurement strategies from buyers, ensuring price stability. However, the prices dropped steadily in the end of the quarter. Conversely, food-grade Lysine Hydrochloride saw more pronounced price growth due to robust demand from downstream food and nutraceutical sectors, both regionally and globally. The Chinese market experienced notable fluctuations, largely influenced by logistical disruptions such as container shortages in northern China and rising freight costs, which inflated export prices and indirectly benefited importers. Additionally, stabilized feedstock costs provided upward momentum for product pricing. Though, with a steady drop in the export prices in the middle of the quarter, the market continued to remain optimistic balancing the overall supply-demand side. As a result, China experienced the most significant fluctuations, the quarter-ending price for food and feed grade Lysine Hydrochloride witnessed a rise and drop of nearly 7 and 6 percent respectively when compared to the previous quarter of the year.
Europe
Throughout Q3 2024, the Lysine Hydrochloride market in Europe experienced a notable trend of decreasing prices for both grades, with Germany being the most impacted by significant price changes. Several factors contributed to this downward trajectory. The market faced oversupply challenges, leading to weakened demand and subdued purchasing activity. Supply chain disruptions, freight cost spikes, and increased availability of competing amino acids further dampened market sentiment concerning the Lysine hydrochloride, resulting in a surplus of the material among the traders. Supporting this further, the euro appreciating against the USD throughout the quarter has provided some resiliency among the buyers, however, the inquiries as of the entire quarter remained muted thereby sustaining an overall pessimistic trajectory. Lastly, the market also witnessed a steady rise for both the grades including a modest rise until August concerning the feed grade and the beginning and at the end of the quarter for food grade, yet the overall market trading sentiments remained weak with transactions occurring on a needly basis only.
For the Quarter Ending June 2024
North America
The pricing landscape for Lysine Hydrochloride in North America during Q2 2024 exhibited a complex pattern, initially showing significant price increases for both feed and food grades, followed by a decline towards the end of the quarter.
For feed-grade Lysine Hydrochloride, prices rose steadily at the beginning of the quarter due to increased regional demand, particularly from the feed sector. Supply chain disruptions, notably the Baltimore bridge collapse, hampered material availability and affected cargo movement, especially on the East Coast. This, coupled with anticipated increased cargo volumes at major West Coast ports and geopolitical tensions in West Asia, contributed to the upward price trend until late May. However, prices began to drop in June as regional demand weakened and U.S. buyers delayed new consignments, creating a supply-demand imbalance. Rising corn prices in key producing nations sustained upward pressure on production costs, as a result traders became reluctant to procure new stock, focusing instead on clearing existing inventories. Companies liquidated stockpiles to reduce storage costs and avoid product spoilage, leading to excess supply and lower prices.
On the other hand, the food-grade Lysine Hydrochloride market experienced similar trends. Initially, prices rose due to increased end-user demand and slightly eased freight charges. However, the Baltimore bridge collapse disrupted trade and affected overall supply, creating an imbalanced market scenario. By May, the food-grade market witnessed subdued inquiry and bearish transaction volumes. Downstream participants adopted a cautious approach, only procuring for immediate needs. The decline in raw material prices, particularly corn, discouraged manufacturers and led to subdued market activity. Sufficient inventories and lower freight charges reshaped trading dynamics positively. The increased product availability alleviated supply shortage concerns, allowing merchants to meet regional demand. Quarter-end destocking activities further contributed to price fluctuations as merchants focused on clearing inventories to offset previous losses. Despite the initial positive trajectory, the overall pricing environment for Lysine Hydrochloride in North America during Q2 2024 ended on a negative note, with prices experiencing a notable downturn. However, a modest rebound was observed in the last month of the quarter. The market dynamics underscore the importance of carefully monitoring demand fluctuations and global supply chain conditions for sustained growth and resilience in the coming months.
APAC
The pricing environment for Lysine Hydrochloride in the APAC region during Q2 2024 experienced significant fluctuations. The quarter began with an upward trajectory in April, particularly in trade originating from China. This was driven by improved manufacturing sentiment, albeit at a moderate pace, as traders focused on depleting existing inventories. The Chinese manufacturing sector continued to expand, supported by higher production costs and energy prices. The depreciation of the Chinese yuan against the US dollar bolstered market resilience and contributed to the upward price trend globally. This currency shift made Chinese exports more attractive to foreign buyers, resulting in increased export volumes. Additionally, reduced freight costs from China enhanced buyer and supplier resilience in trading nations, further boosting Lysine Hydrochloride exports in April. The long-term contract signing season in April and May saw a surge in trade activities, with bulk procurements aimed at securing potentially lower long-term prices before the onset of spring and summer. However, as May commenced, prices for both grades began a steady decline. Downstream demand weakened, with consumers purchasing only in smaller quantities. New inquiries reduced, prompting downstream trading entities to adopt a cautious approach and closely examine uncertainties in both regional and overseas end-user demand. International trade disputes, tariffs, and geopolitical tensions disrupted global supply chains, impacting demand for imported Lysine Hydrochloride. This led to uncertainties in key markets, affecting product availability, causing container shortages, and extending lead times. Consequently, new orders and demand from overseas buyers dampened, sustaining the downward price trajectory. The decline in factory-gate prices highlighted ongoing deflationary pressures in the industrial sector, attributed to overcapacity and sluggish demand both domestically and internationally. Furthermore, the appreciation of the yuan against the dollar made imports more expensive for trading nations, weakening purchasing sentiments and supporting weak market conditions. These factors compelled businesses to reassess pricing strategies, potentially impacting consumer prices across sectors. As a result, the overall market sentiment remained cautious and consolidated, with downstream sectors like the food industry showing only sporadic interest and limited orders.
Europe
The second quarter of 2024 saw a general decline in importing prices for both grades of Lysine Hydrochloride, though with some fluctuations. April 2024 began with a significant drop in feed grade prices, while food grade prices stabilized. This downward trend was primarily due to complex global market dynamics and higher stockpiles. Throughout April, the European feed-grade lysine hydrochloride market experienced low activity. Spot inquiries were quiet, and traders in both inland and coastal markets held high stockpiles. Buying interest waned as market participants focused on destocking. In contrast, the food-grade domestic market was active, with traders and buyers eagerly building inventories. This benefited merchants and downstream suppliers, who sold at higher prices as the Euro depreciated against the dollar in the German market. The limited impact of Red Sea disruptions and decreased freight costs from China contributed to market resilience and a gradual increase in import quotations. May 2024 saw a shift in market dynamics. The feed-grade domestic market became more active, with traders and buyers focusing on inventory procurement. This allowed merchants and downstream suppliers to maintain profit margins while selling at higher prices. Ongoing conflicts in the Red Sea led to increased freight costs and longer transit times, sustaining higher prices across the region. Meanwhile, the food-grade Lysine Hydrochloride market continued its downward trend due to high stockpiles and complex global market factors. The pessimistic trend persisted into June, with both markets experiencing light demand from downstream consumers, indicating weaker consumption patterns. This dampened the overall trading atmosphere. Changes in manufacturers' and suppliers' preferences towards competing amino acids, including Lysine, may have contributed to the continued downward trajectory. Regarding trade, logistics indicators had been trending upward, reaching a yearly high and resulting in increased freight costs from key producing nations. This led to lower import volumes, further weakening market sentiment. Traders struggled with excessive stockpiles and weak purchasing interest, contributing to an overall downward trend in trade dynamics. The continuous spike in transportation costs significantly impacted businesses reliant on shipping. Many companies reassessed their pricing strategies, either absorbing the costs or passing them on to customers. This resulted in higher prices for consumers, reducing purchases and maintaining weak, consolidated market sentiments.
For the Quarter Ending March 2024
North America
The pricing landscape for Lysine Hydrochloride in North America throughout Q1 2024 has been predominantly negative, marked by significant price declines. Various factors have contributed to this trend. Firstly, there's been a sustained decrease in demand from the livestock and food sectors, particularly notable in the United States, a major importer of Lysine Hydrochloride. Secondly, traders and retailers, having previously stocked up inventory at higher prices in anticipation of continuous price hikes, were now prioritizing destocking at discounted rates, further pushing prices down.
Additionally, the decline in raw material prices like corn has discouraged manufacturers, leading to subdued market activity. Additionally, the prices of Lysine Hydrochloride, both feed and food-grade variants, witnessed a notable downturn until the final weeks of February was further compounded by market participants' reluctance to procure goods at higher costs due to rising freight charges and delayed consignments ahead of the Lunar New Year holidays. The USA's strategic pricing adjustments including the trading of goods at a discounted rate to prevent the additional cost of storage and deterioration of the product and to enhance global competitiveness significantly continued to influence the global Lysine Hydrochloride market, impacting prices until the final weeks of February 2024.
However, towards the end of the quarter, in March 2024, there was a steady rise in regional consumption of Lysine Hydrochloride in both the feed and food industries. However, sectors encountered sufficient inventories to meet overall inquiries within the region, reshaping trading dynamics positively. Lower freight charges additionally provided resilience and buying opportunities for the merchants at reduced rates. The increased availability of products relieved concerns about supply shortages, allowing merchants to meet regional demand throughout the month. Additionally, quarter-end destocking activities further contributed to price rises, as they focused on clearing inventories to make up for previous losses based on regional inquiries and quotations. Overall, the pricing environment for Lysine Hydrochloride in North America during Q1 2024 has been negative, with prices experiencing a notable downturn, albeit with a modest rebound in the last month.
APAC
The pricing environment for Lysine Hydrochloride in the APAC region during Q1 2024 has been challenging, with values experiencing fluctuations influenced by various factors. Across the region, prices have generally trended downwards, with China being the most impacted market. Several significant factors have influenced market prices during this quarter. Firstly, owing to the previous anticipation of the heightened demand side, there results in an increased production capacity across the region. While, in contrast to this, the expected demand did not materialize, particularly from downstream industries such as agriculture, livestock, and food, leading to excess supply and resulting in a price depreciation. As a result, merchants across the exporting nations primarily China were dealing with high inventory levels coupled with an added cost of storage. Furthermore, the prices of raw materials, such as corn, which is a key feedstock for Lysine Hydrochloride production, have decreased considerably which has further contributed to the overall decline in its cost. As a result, to mitigate losses of weakened profit margins, manufacturing units focused on a to reduce production capacity instead focus on to clear their inventories yet at a lower cost. Prices have consistently decreased throughout the final weeks of February 2024, driven by weakened purchasing sentiments from importing regions and ample stocks among merchants. However, as the market moved forward towards the termination of the first quarter there witnessed a steady uptick in overall overseas market consumption for Lysine Hydrochloride. While merchants within the exporting and importing regions possessed sufficient inventories concerning the overall demand side initially. But with the continuous rise in inquiries supported by the ease in freight cost benefitted the importing nations to procure their goods at a lower added cost from major exporting nations. This at the same time, provided an opportunity for producing nations to clear out their inventories as the market reopened considerably after the Lunar New Year breaks. With resuming operations, there has been a pressing need to replenish inventories with fresh stock. Moreover, the desire to procure in bulk has further accentuated demand dynamics throughout the month. Overall, the pricing environment for Lysine Hydrochloride in the APAC region during Q1 2024 has been negative, with prices trending downwards with a steady rise at the end of the quarter.
Europe
The first quarter of 2024 has been challenging for the Lysine Hydrochloride market in Europe, including Germany. Overall, market prices for Lysine Hydrochloride have experienced a downward trend concerning the food grade while a mixed trajectory concerning the feed grade during the period. Several factors have influenced this pricing environment. Initially, concerning the food grade, the market started on a bearish note following the trend until the final weeks of February and ended March witnessing a modest rise where the demand side was successfully balanced with the overall supply side. On the other hand, concerning the feed market, the feed industry, which is a major consumer of Lysine Hydrochloride, initially has seen higher consumption of Lysine across the livestock and other sectors. While at the same time supported by higher regional demand, concern regarding the escalation cost of freight ahead of the Red Sea dispute and other input materials such as energy further contributed to this heightened trajectory for Feed grade lysine hydrochloride until the final weeks of January. However, anticipating the same trend in the forthcoming period merchants continued to stockpile higher inventories among their warehouses to prevent future shortages,
However, a contrasting trend emerged at the start of February, marked by a significant decline in demand from the regional feed market, resulting in an oversupply of Lysine Hydrochloride. This trend was mirrored in producing nations, exacerbating the situation. The ramped-up production capacity in preceding months, notably in China, contributed to an excess of amino acid, fostering intense competition among manufacturers and subsequently driving prices downwards worldwide. While, as March unfolded, this trend underwent a reversal, with the market stabilizing due to moderate demand and ample supply. Currency fluctuations, particularly the depreciation of the Euro against the USD, influenced the pricing landscape. In response, traders focused on liquidating their inventories at higher prices to accommodate new stocks as the second quarter commenced. In conclusion, the Lysine Hydrochloride pricing environment in Europe, particularly in Germany, has been negative and unstable in the first quarter of 2024 concerning both the feed and food sector.
For the Quarter Ending December 2023
North America
The final quarter of 2023 in the North American region was marked by notable fluctuations in the pricing of Lysine Hydrochloride, particularly influenced by diverse downstream consumption patterns within the feed and food sectors. The conclusion of Q4 left both grades on a pessimistic note, with the feed grade maintaining a consistently negative outlook, while the food sector showed a modest sign of improvement during the mid-quarter. Throughout October 2023, both grades experienced price declines due to reduced downstream consumption, coinciding with an oversupply among market participants. Additionally, the ongoing economic turmoil in the United States, coupled with the global acceleration of inflation, discouraged distributors and suppliers from further restocking as existing inventories remained surplus and needed to be consumed first.
Moving into November, the market witnessed a sudden surge in demand from both domestic and international markets in the food sector, supporting a modest price increase. Despite the supply side remaining sufficient, factories exhibited optimistic market behavior in terms of sales. Concurrently, congestion at certain US ports led to significant delivery delays, subsequently increasing shipping costs for businesses. These elevated costs were eventually passed on to consumers in the form of higher prices. However, as December 2023 concluded, prices experienced a considerable decline once again. Several market indicators highlighted the subdued state of the L-Lysine Hydrochloride trade in the USA, with import quotations temporarily halting due to a limited influx of orders from domestic suppliers. Moreover, 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, commenced.
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 surge in costs resulted in a narrowed spread chart, signaling an adjustment in the pricing dynamics within this segment of the market. The interplay of these factors intricately shaped the landscape of the Lysine Hydrochloride market in North America during the concluding quarter of 2023. With this, the prices of L-Lysine Hydrochloride for feed grade were recorded at USD 1545/MT, while that of for food grade were assembled at USD 2430/MT.
APAC
Throughout the fourth quarter of 2023, the Lysine Hydrochloride market in the APAC region underwent significant developments that impacted prices for both feed and food grades. In the initial stages, particularly in October, there was a notable decrease in prices for both Lysine Hydrochloride grades, mirroring a trend observed in other amino acids. This decline can be attributed to heightened production activities in the preceding months, resulting in a substantial accumulation of inventories among domestic suppliers and traders. Consequently, merchants have been recalibrating their market prices for specific amino acids, returning them to normal levels from previously inflated rates. As we transitioned into November, a sudden rebound in downstream consumption for Lysine Hydrochloride in the food sector became evident. This surge was propelled by increased consumption of meat and dairy products containing higher levels of Lysine Hydrochloride, both domestically and globally. Despite the upward trend in consumption, the supply of Lysine Hydrochloride remained sufficient to meet inquiries, with manufacturers maintaining adequate stock levels. Additionally, the appreciation of the Chinese yuan against the dollar influenced market dynamics, elevating expenses for importing buyers and traders and resulting in higher importing costs. Moving towards the conclusion of the fourth quarter of 2023, Lysine Hydrochloride prices once again experienced a decline, signaling a pessimistic outlook in demand. Furthermore, the substantial decrease in the prices of essential raw materials, particularly corn, has intensified the reluctance of manufacturers to actively engage in restocking practices. Against the backdrop of heightened production activity in the previous month, there has been a consequential increase in available stocks among merchants. This surplus, combined with weakened purchasing sentiments, has strategically compelled merchants to focus on destocking their inventories at reduced prices. The industry is currently navigating a scenario where prioritizing cost-saving initiatives takes precedence over expansionary efforts, given the prevailing market conditions. With this, the prices of L-Lysine Hydrochloride for feed grade were recorded at USD 1265/MT, while that of for food grade were assembled at USD 2100/MT.
Europe
Throughout the final quarter of 2023, the pricing dynamics of Lysine Hydrochloride in the European region, particularly in Germany, were significantly influenced by the prevailing market trends in its major exporting nations, notably China. In the initial stages of October, the pricing patterns for both grades of Lysine Hydrochloride mirrored those observed in other importing regions, such as North America. The European market witnessed a downturn in Lysine Hydrochloride prices, primarily driven by a reduction in downstream consumption within the end-user industry and a decline in consumer confidence. With diminished consumer purchasing activity, the overall supply levels for both grades in the German spot market were deemed sufficient to fulfill the compiled orders for October. Additionally, trade activity within European nations remained subdued, mainly propelled by inquiries that had already been received. As the calendar turned to November, a notable surge in demand for specific amino acids, including Lysine Hydrochloride, was observed, particularly from the food sectors. This heightened demand was further exacerbated by a substantial number of recent factory shipments experiencing delays until mid-November 2023, thereby being affected by trade disruptions. This event disrupted the smooth flow of consignments, leading to rerouting activities and causing an imbalance in the supply-demand outlook, resulting in higher transportation costs. However, concluding Q4 in December 2023, prices for L-Lysine Hydrochloride experienced another decline, marking the end of the fourth quarter on a pessimistic note. 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. With this, the prices of L-Lysine Hydrochloride for feed grade were recorded at USD 1570/MT, while that of for food grade were assembled at USD 2500/MT.
