Feed additive market trends: Supply side remains robust, all the buzz is about DSM and BASF
Kemiex operates an electronic trade and information platform and network and its clients include professional bulk buyers, traders and producers of feed/food additives and active ingredients.
“As the industry consolidates further, DSM successfully executed its M&A playbook with the acquisition of Biomin and Romer Labs from Austria-based Erber Group.
“It is a perfect business and culture fit, and strategically adds to previous transactions that aim at securing technology, raw material supply, as well as distribution and advisory capabilities,” commented Schmidinger
Meanwhile, German chemicals giant, BASF, is facing some challenges with Vitamin A and AD3, noted the Kemiex lead.
“Clients reported that some deliveries from long-term contracts were impacted by production issues that are unlikely to be resolved before year-end. The news led to some spot buying at elevated levels. However, irrational price spikes did not materialize because some of the issues were known for months,” Schmidinger told FeedNavigator.
In general market developments, he noted companies have closed most of their supply contracts for the second half of 2020, some even into early 2021. “Few supply imbalances or late arrivals have been reported to us.”
Amino acids
European amino acids have been trading mostly flat, while prices of methionine and tryptophan of Chinese origin have begun to decline, added the Kemiex representative.
China is expected to issue a statement on the methionine anti-dumping probe soon, while European importers are following European Commission authorizations on lysine closely as import restrictions enter into force, he added.
“In terms of the vitamin sector, we continue to see strong vitamin C and vitamin E prices, while some products like B1, D3, biotin and calcium pantothenate recede from previous highs,” continued Schmidinger.
Partially, movements are driven by lower volumes ahead of summer and maintenance season and might change soon again, he explained.
Demand post COVID-19
“The supply side remains robust in the main - feed additives are not impacted by lockdowns in India or the air cargo frenzy that has been seen for pharmaceuticals.
“However, all market participants are closely following the recovery path of global economies and consumer demand post-COVID, with foodservice sectors impacted by lockdowns and spill-over effects observed around animal protein and feed production.”
In terms of feed demand, he noted how FEFAC recently announced its forecast that EU compound feed production will likely decrease -3 to -6% in 2020, and that the US Department of Agriculture (USDA) reported US meatpacking facilities are again operational, with 98% of US beef facilities, 95% of US pork facilities and 98% of US poultry facilities operating at capacity.
“Reports of second waves of COVID-19 and ASF infections in several countries are being followed closely but have not led to panic buying or selling for the moment,” said Schmidinger.
