There is increasing volatility in amino acid and vitamin prices compounded by shifting geopolitical and logistical dynamics, according to Kemiex.
The feed additives market in December and January has been dominated by growing pressure on lysine. The EU’s official imposition of provisional anti-dumping duties on Chinese lysine imports has driven up prices for L-Lysine HCl and sulfate throughout Europe.
“A separate piece of EU regulation regarding tariff-free import quotas has caused widespread confusion about the actual cost of importing Chinese goods,” notes Stefan Schmidinger, chief analyst at Kemiex.
In response to these changes, major Chinese producers, including Meihua and Wanli Runda, have announced adjustments to their production and marketing strategies.
The situation has been further complicated by the EU’s anti-dumping investigation into L-valine and Brazil’s probe into lysine imports, both of which have heightened market uncertainty for amino acids, reports Schmidinger.
Amid these challenges, Avril’s Eurolysine, the only lysine producer in Europe, is expected to ramp up production capacity, capitalizing on the improved market conditions and reduced competition from Chinese imports.
FEFAC reacts to EU’s anti-dumping duties on Chinese lysine
Responding to the EU Commission’s decision to impose high anti-dumping import duties on lysine from China, FEFAC president, Pedro Cordero, says the EU premix and compound feed manufacturers are deeply alarmed by the extremely high level of the provisional EU import tariffs on lysine.
Currently, the EU relies on China for 60% of its lysine demand, equivalent to about 500,000 tons of lysine hydrochloride annually. "There are insufficient alternative supplies from EU production or other third countries to replace imports from China. Consequently, this measure could have significant negative economic repercussions for the EU feed and livestock sectors.”
FEFAC is urging the Commission to “provide effective and targeted financial compensation for EU livestock farmers, who will face heightened competitiveness challenges, particularly in poultry and pig production.”
Additionally, the trade group calls for targeted EU policy measures aimed at strengthening the competitiveness of domestic feed additive producers. These measures, according to Cordero, could reduce the EU's strategic dependence on China for essential feed additives, which should be formally recognized as “critical materials.”
Vitamin and methionine developments
In December, the EU granted market authorization to CSPC’s Hebei Huarong Pharmaceutical Company for Cyanocobalamin (vitamin B12) as a feed additive for all animal species, making it the third approved producer in the region.
The price spikes for vitamins A and E, triggered by the mid-2024 incident at BASF’s Ludwigshafen plant, have begun to ease but remain significantly above pre-incident levels, according to Kemiex data.
Methionine markets face ongoing disruptions as a fire at Sinopec’s Zhenhai base in China may delay liquid methionine (MHA) production by three to six months or longer, adds the Swiss market intelligence group.
“Currently, ask prices for methionine and vitamin E in China are climbing ahead of the Chinese New Year holidays. In addition, maintenance shutdowns are planned by key producers, including NHU, ZMC, DSM-Firmenich, and Nenter’s Yimante, which could temporarily tighten supply.”
The sector has shown resilience though, with Zhejiang Garden forecasting a sharp increase in FY 2024 profits, driven by strong vitamin D3 prices and the launch of new vitamin A products.
“Furthermore, a new market entrant is set to achieve FAMI-QS certification soon, having already distributed initial vitamin A samples to global end-users,” reveals Schmidinger.
Chinese New Year
As the Chinese New Year approaches, global trading activity is moderate with the focus turning towards Q2 2025 onwards, reports Kemiex.
Geopolitical risks
With Donald Trump beginning his second term as US President on January 20, global markets remain cautious about potential trade and foreign policy shifts. Proposed tariffs prompted a surge in Chinese exports during December 2024, causing slight increases in freight costs along Transpacific routes, warns Kemiex.
Despite global uncertainty, Brazil’s agricultural export sector continues to grow. Exports of soybeans, meat, and corn are forecasted to rise by 5.7% in 2025, supported by a weaker Brazilian Real.
Freight market trends
Spot rates and futures have declined significantly, thanks to the resolution of the US International Longshoremen’s Association labor contract, which alleviated fears of strikes. February, however, may bring temporary disruptions as carriers adjust East-West networks and alliances, combined with reported port congestion in Asia, Europe, and North America.
A potential bright spot lies in the Middle East: a recently brokered ceasefire between Israel and Hamas, if it holds, is expected to boost sea traffic through the Suez Canal, potentially adding capacity and reducing freight costs, concludes Schmidinger.
