Amino Acid Prices, Monitor, Analysis & Demand

North America

In the fourth quarter, the Amino Acid market witnessed fluctuations in pricing. Prices saw an initial increase in early October, sharply declined in mid-Q4, and rebounded towards the quarter's end. The uptick at the start of the quarter was attributed to heightened demand from the Asian market, fuelled by a positive outlook. Industry experts noted downstream businesses raising prices, notably driven by the onset of the winter season, resulting in a surge of domestic inquiries for Amino Acid in recent months.

However, November marked a significant decrease in Amino Acid prices in the United States. The primary factor was the decline in Amino Acid prices in major exporting countries, with the USA following suit as an importer. Reduced prices in APAC provinces, a key player in the Amino Acid market, had a cascading effect on the overall pricing structure in the USA. This decline resulted from diminished international market demand, prompting the exporting countries to lower their exporting prices. Additionally, surplus inventory accumulation among US suppliers impacted prices and reflected challenges in managing inventories efficiently. The combined influence of international and domestic factors led to a substantial decline in Amino Acid prices throughout November. As December 2023 began, the United States witnessed a slight rebound in Amino Acid prices, closely mirroring the trajectory of exporting countries. This synchronization contributed to robust market sentiments, intensifying upward price pressure.

Ongoing incidents like ship attacks near the Suez Canal and persistent congestion in the Panama Canal added complexity to the global supply chain. A container shortage, exacerbated by vessels not returning to Asia on time and ocean carriers cancelling sailings on short notice due to ship diversions, further contributed to the challenges. Businesses grew more optimistic about the future, leading to increased investments, especially during the festive season when consumer demand rose. Additionally, market participants placed bulk orders to replenish inventories, creating a surge in demand that compelled businesses to raise their quotations.

Asia Pacific

In the APAC region, the Amino Acid pricing landscape in the fourth quarter of 2023 was influenced by various factors, with notable dynamics observed in India. The market situation in India, experiencing significant shifts in Amino Acid prices and displayed a mixed scenario. Firstly, there was a moderate increase in downstream purchasing activity, driven by higher consumption of specific amino acids in the feed and food sector, leading to a consistent influx of overseas and regional market demand. Additionally, the depreciation of the Indian rupee against the dollar further strengthened the price trend, promoting increased exports. This depreciation enhanced the competitiveness of Indian exports in the global market, making them more appealing to foreign buyers due to their affordability. This optimistic scenario contributed to India's export earnings, fostering overall economic growth throughout October 2023. Moving forward in November, On the supply side, some industry participants noted that operational activity remained on the lower side for the entire month, with ample stockpiles of Amino acids among merchants. The market saw a limited circulation of goods, and traders actively focused on clearing their stockpiles, resulting in a relatively small market transaction volume with a bearish trading atmosphere. Demand, in contrast, was subdued, with buyers placing orders based on immediate requirements. While, once again, in December 2023, the Indian market experienced a significant increase in downstream consumption of specific amino acids, such as Valine, across the regional market. This positive trend is expected to continue into the following month and throughout the first quarter of 2024. Also, Market analysts are optimistic, foreseeing potential shortages of amino acids in early 2024 due to factors like production limitations and export restrictions. In response to these projections, buyers have proactively engaged in stockpiling, leading to a further upward drive-in price. Additionally, traders focused on increasing their future stock levels, further exacerbating the market conditions in December.

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Europe

In the European market, particularly in Germany, the price trend throughout the entire fourth quarter of 2023 closely mirrored that of exporting nations, primarily India. Prices surged at the beginning of the fourth quarter, plummeted in November 2023, and rebounded towards the end of the quarter. In October, the increased demand for Amino Acid was influenced by various factors, including rising production expenses and soaring energy costs in exporting nations, consistently driving overall market prices upward. In response to this heightened demand, market participants issued fresh price quotes to replenish inventories and meet customer needs. Downstream panel factories adjusted procurement based on demand, leading to increased bidding and offers among enterprises, influencing market dynamics. As Germany played the role of an importing nation, its Amino Acid prices followed the trend of the major exporting country, resulting in a noticeable price decrease. Regarding the broader supply aspect as of mid-Q4, there was ample availability of Amino Acid, and downstream procurement primarily relied on consistent demand. Operational stability was observed in the near term, albeit with diminished strength. Local manufacturers were accumulating a considerable inventory to meet domestic demand. Additionally, the Consumer Price Index (CPI) for Germany in November 2023 was 186.3 points, reflecting a 0.4% decrease from October 2023. Globally, central banks, including the European Central Bank (ECB), were raising interest rates to combat inflation, resulting in increased borrowing costs and a dampening effect on economic activity. Lastly, in December 2023, the German market witnessed a modest rebound in Amino Acid prices. This abrupt price increase can be attributed to a confluence of factors shaping market dynamics during this period. One of the primary drivers of this surge was increased demand from the downstream sector, driven by a combination of factors. As customer confidence improved, there was a noticeable uptick in consumer purchases of Amino Acid, contributing to a surge in demand. This heightened demand exerted pressure on existing supply chains, leading to a ripple effect on prices. The escalating global cost of freights played a crucial role in influencing market dynamics for Amino Acid in Germany.

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