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Lysine: supply and demand game for another six months

Echemi 2020-07-08

July is approaching, half of this year has passed, and 2020 is destined to be the most extraordinary year. And lysine is not a small half-year change. It has both reached the top of the mountain and has fallen into the trough. The prices have fluctuated. Exports have been ups and downs. Now that the demand is in the off-season, what is the trend of lysine in the future? Let me talk about the ups and downs of lysine in the first half of the year, and then talk about whether lysine has a chance to rise against the trend.

Market prices rise first and then fall

In the first half of the year, the average market price of 98.5% lysine was 6.98 yuan/kg, up 6.56% month-on-month, down 2.38% year-on-year, and the average price of 70% lysine market was 4.44 yuan/kg, up 4.96% month-on-month and 4.76% year-on-year. In January and February, it was mainly due to the impact of the epidemic, which led to the obstruction of logistics and transportation. Until mid-February, the downstream warehouses were gradually replenished, and the tight supply of superposition caused the lysine market price to rise sharply. In March and April, due to the strong price of raw corn and the favorable export, The price of lysine rose; May and June entered the low season of demand, dragging prices down.

Overall weak domestic demand, export orders have reached new highs

In the first half of the year, due to the continued impact of the epidemic, the demand for poultry feed declined significantly. Breeding continued to enter a loss range. Although the pig feed has gradually recovered, the recovery progress is not optimistic, and the aquatic feed has not improved. Overall, domestic demand is tepid. It is even more weak; but foreign performance is particularly favorable. According to customs data, China’s cumulative export of lysine and lysine salts and fats from January to May 2020 was 358,800 tons, a year-on-year increase of 47.84%, especially March and April set a record high in export orders.

Increased production capacity by 350,000 tons, started high supply export

According to preliminary statistics from my agricultural product network, the annual production capacity of domestic manufacturers of lysine has reached 3.8 million tons, an increase of 350,000 tons from 2019. Among them, Shouguang Golden Corn was 150,000 tons and Heilongjiang Wanli Runda was 200,000 tons. In the first half of the year, it was affected by the epidemic situation, and the start-up fell to 48%. After the subsequent logistics dredging, the start-up has steadily increased to 69%. Currently, due to cost pressures, the overall start-up has further dropped to 66%.

The double pressure of cost and price

The six beats of corn ended on Thursday. The continued popularity caused further pressure on the cost of deep processing. The market price continued to decline due to the drag of demand. The mainstream transaction price of 70 lysine market has reached 4.0 yuan/kg, and 98 lysine has reached 7.0 yuan. /Kg, causing manufacturers to stop public quotation, most of the actual single bargaining transactions are mainly, and some companies plan to shut down for maintenance in July, or will ease market supply problems, the market supply and demand will continue to game, under the dual pressure of stacking costs and falling market prices In the short term, lysine prices are expected to be mainly weak and stable. If you want to rise against the trend, you need to pay attention to the raw grain price trend, the export situation of the manufacturers, the production situation of the manufacturers and the recovery of downstream demand.

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