Vitamin and amino acid markets: Price shifts, freight rate cuts, and evolving meat trade dynamics
In Europe, amino acids show a potential for price declines, while vitamins B3, B12, and D3 hold firm. Meanwhile, the markets for vitamins E and A are softening, with more competitive lower offers appearing, according to a Kemiex report.
BASF has outlined its plan to restart production following the fire and explosion at its Ludwigshafen facility in Germany in late July. Production of ingredients is expected to resume by Q1 2025.
Last week, a fire hit Grillo Chemicals’ Zinc sulfate plant in Germany, while a Chinese Dl-Methionine producer temporarily halted operations due to a dust explosion. The global market impact is expected to be limited, as the brand is less prominent in the EU and North America.
Vitamin producers such as ZMC, DSM-Firmenich, and others are gradually resuming production after maintenance shutdowns.
Following the successful opening of its 48,000-ton-per-year Citral plant, Wanhua is set to expand its vitamin A and menthol production by year-end. The market is also awaiting new data from Chinese customs to assess latest trends in vitamin E exports.
DSM-Firmenich could see a boost of €50-80m in EBITDA in Q4 2024 due to favorable vitamin market pricing. This may improve conditions for its ANH business, which is being spun off into 2025, comments Kemiex chief economist Stefan Schmidinger.
Freight rates
Freight carriers are cutting rates ahead of China’s mid-autumn and Golden Week holidays. Drewry’s World Container Index dropped 13% this week, with a notable decline in rates from Shanghai to New York (-21%) and Rotterdam (-17%). Kemiex reports that many goods have already been shipped in advance, mitigating peak season congestion.
General rate increase attempts have been less effective, offering hope for further freight rate normalization. However, a return to historic rates remains unlikely until Middle East and Red Sea shipping routes are stabilized, reports Schmidinger.
Geopolitical risks and financial markets
In the US, the upcoming presidential election has raised concerns about the potential for new tariffs, possibly as high as 60%, if Trump is re-elected, according to the market analyst.
Global central banks are also beginning to consider lowering key interest rates, Schmidinger adds.
Feed and meat production outlook
China's feed production is down 3-4% year-to-date compared to 2023, sparking concerns over near-term demand, as per Kemiex data.
Meat trade trends are mixed across major regions: China's year-to-date swine imports have dropped 44%, while beef imports have risen by 9%. Brazil's beef exports are up 30% year-on-year, swine exports are up 5%, and poultry exports are down 1%. US poultry exports have fallen 11%, and beef exports are down 3%, while pork exports are up 4%. EU beef exports have risen 20%, poultry exports are up 11%, and swine exports have fallen 9%, marking the lowest volume since 2017.
