Vitamin B5 prices, which have seen a lot of volatility over the past two years, have reached levels of US$16-17/kg and markets are unsure whether additional capacity from several producers will cause further drops to US$9-14, as seen in 2021, or that the price will shoot back up, to above US$20.
Other vitamins were mostly trading lower amid moderate buy-side activity and supply overhang, noted Kemiex.
In China, stronger Dl-methionine imports from Singapore, Malaysia and Japan since November has led to falling prices.
Lysine and threonine are trading sideways on depressed levels, reflected also in statements from global amino acids producers in their annual result briefings that 2022 was a challenging year for high volume products used in poultry, pig and other protein sources, with amino acids strongly impacted by animal diseases and inflationary effects throughout the supply chain, according to a market outlook by the Swiss data and trading platform.
Looking at the financial results from global players, DSM and Adisseo, the numbers confirm the challenges of Q4, and full-year 2022, respectively, commented Stefan Schmidinger, chief economist, Kemiex.
“DSM saw organic sales growth in its animal nutrition and health unit; however, those gains were mostly driven by pricing/mix and currency effects rather than volumes. Adisseo recorded strong revenue growth, driven by methionine in China, the Middle East and price increases, but profits plunged -15.3% YoY. Many vitamins saw a slowdown in demand and ongoing pricing pressure, resulting in production cost and working capital optimization campaigns, especially in Europe.”
In other Europe related developments, Chinese yeast producer, Angel Yeast, is in the final stage of listing its global depositary receipts at the Swiss Stock Exchange, said Kemiex.
Evonik has been active of late, opening a new distribution center in Brazil, and investing into methionine intermediates production in Germany and US, while ADM has also invested in modern probiotics facilities in Spain.
Sea freight has been the brightest spot for global traders, with slipping spot rates and reduced port congestions, as upcoming capacity is outgrowing demand for freight space.
Meanwhile, some investment banks have lowered their exchange rate forecasts anticipating that China’s re-opening will strengthen the Chinese Yuan in the mid-term, keeping it stable against a solid US dollar.
“A lot is riding on China’s re-opening with hopes growing for a better-than-expected global economy,” Schmidinger told us.
China exports update
During 2022, China’s export quantities of lysine increased +12%, methionine +33%, while other additives saw a year-over-year drop in volumes: Threonine -4%, vitamin B5 -40%, vitamin E -16%, vitamin B1 -17% and vitamin A -32%, found a Kemiex review.
MCP exports were +6% higher, but feed-grade DCP exports came in at -42% lower than those for 2021. Exports of copper sulfates were up +23%, yet below earlier years, while export volumes of ferrous sulfates were +28% higher. Zinc sulfates exports were -12% below the previous year.
Exports of urea from China to Europe gained traction in the second half of 2022, a region that relied upon other origins in the past, mirroring developments in Asian markets, which source that component from China.
Phosphates, including those used in feed, are seeing price decreases, a reversion to historic levels, following on from the skyrocketing prices and demand destruction over the past year, added the Swiss startup.