Hello Partners!
Welcome back to our Newsletter!
We delve into recent trends and developments across various segments of the global market. Focusing on key commodities such as vitamin C, monocalcium phosphate (MCP), and specific raw materials from China, we examine factors influencing their demand, pricing, and supply dynamics.
Usually, around the turn of December/January, disruptions in container shipments from China are common, often accompanied by noticeable increases in freight rates.
Let’s take a look at what else is happening on the market!
Hottest Products of the Week
Amino-acids
Currently, there is a declining trend in the market for most feed amino acids, with the most significant decrease observed in Lysine, HCL. This trend is particularly notable given the economic factors influencing the market, including increased production efficiencies and changes in global demand. As a result, transaction prices for Q1 are expected to be even lower than those in Q4 of the previous year, reflecting a potentially long-term shift in the pricing dynamics of these essential nutrients. This shift could have significant implications for feed manufacturers and the broader agricultural sector, as they adjust to these new market conditions.
Threonine
Threonine is showing the strongest resilience in maintaining its current price trend in the market for feed amino acids. This stability, notable amidst overall declining trends in other amino acids, suggests a more robust demand or a more controlled supply for threonine. However, projections for the first quarter indicate that we might witness some degree of price reduction, though these declines are expected to be less pronounced than those observed in the case of lysine. Similarly, the market dynamics for methionine are echoing those of threonine. Methionine, like threonine, is showing a relative price stability in the current market, which may be attributed to factors such as consistent market demand, production efficiencies, or other sector-specific economic influences.
Feed producers, anticipating further increases in prices, are showing a heightened interest in securing large contracts for the upcoming quarters. This trend is driven by recent market uncertainties, including fluctuations in raw material costs and supply chain challenges. By locking in substantial orders now, they aim to mitigate the risks associated with rising prices and ensure a consistent supply, reflecting a shift towards more proactive and strategic sourcing in the face of an unpredictable market environment.
Taurine
Taurine – for the past few weeks, we have seen a notable increase accompanied by strong buying activity, mirroring the trend in vitamin C. This rise in prices can be attributed to various factors, including increased demand and possibly limited supply. The pattern of purchasing has shown a marked acceleration, indicating a growing urgency among buyers to secure supplies at current prices, possibly ahead of further price increases. Similar to vitamin C, this trend could be due to seasonal shifts in demand or other market dynamics.
Citric Acid
Citric Acid – Annually, around the holidays and the beginning of the year, we typically see a decrease in prices due to seasonal market shifts. However, as the new year starts, there’s a noticeable uptick in demand for beverages.
Xanthan Gum
Xanthan Gum – Prices are currently declining, reaching levels similar to those from two years ago. At this point, we’re seeing the lowest values yet, making it an opportune time for partners to consider their purchasing options.
Vitamin C
Vitamin C – there is an increased consumption of vitamin C due to the sickness season, leading to rising prices and limited availability of raw materials. Asian producers have recognized the opportunity to raise prices for Q1, which means that the remaining raw materials in the EU are now considered much more valuable than they were three weeks ago.
Creatine
Creatine – There is currently a high number of inquiries in the market, and we’ve seen prices for raw materials from China stabilize at a range of 8,5 to 9 EUR/KG. This price stability reflects a steady demand for these materials, which has remained consistent over time. As the new year approaches, this ongoing demand, coupled with the usual market dynamics, suggests that we might see slight increases in prices. While the market has maintained a balance thus far, the beginning of the year often brings subtle shifts in both supply and demand, which could be the driving force behind these anticipated price changes. Therefore, stakeholders should stay alert to these evolving market conditions as we move into the new year.
There is currently a significant and sustained increase in demand for monocalcium phosphate (MCP). This resurgence is probably related to its important role in animal nutrition and feed formulations.
What Else?
Sichuan Shengda Group, a key player in China’s petrochemical industry, has restarted its terephthalic acid (TPA) plant in Nanchong, Sichuan Province. The plant, with a 1 million ton annual capacity, resumed production following essential repairs that began on September 20. TPA is a vital raw material for producing polyethylene terephthalate (PET).
In Europe, acetone prices rose in November due to higher upstream costs amidst weak demand. Rising natural gas prices since August 2023 have influenced this trend. The European petrochemical sector faces challenges from high energy costs and global competition. While recent inflation has eased, input costs remain high. Acetone prices are expected to decline by year-end with a potential rebound in early 2024.
The global xanthan gum market, valued at $1 billion in 2021, is expected to grow at a 5.9% CAGR, reaching $1.9 billion by 2031. This growth is driven by its increasing use as an egg substitute in food and beverages, and its applications in pharmaceuticals and personal care products for its thickening, stabilizing, and emulsifying properties.
The citric acid market, integral to various industries like food & beverages, pharmaceuticals, and cosmetics, is forecasted to grow significantly. This growth, driven by its diverse applications as a preservative and flavor enhancer, is projected to increase the market value from $4,081.7 million in 2022 to $7,028.2 million by 2032, growing at a CAGR of 5.6%.
