Glucosamine Prices are expected to fall in China due to Lower Demand and Sufficient Stockpiles Available to Buyers

The markets in China resumed their operations on February 7th following the celebrations of the Lunar New Year, due to which the markets across the country were shut for a week. After the Spring Festival holidays, markets in China witnessed strong gains with boosted sentiments from Monday with the intention to make 2022 productive, a year which started on a serious note of many uncertainties, including the unprecedented wave of infections and geopolitical tensions. Despite all the uncertainties, several producers remained occupied by filling mass export orders amid festive holidays and the ongoing Winter Olympics. However, market players are still worried that the growth of new orders and clients is likely to get disrupted by the growing number of Omicron cases in the country which could result in a significant slowdown in export growth.

According to the statement of the National Development and Reform Commission (NDRC), the country must take measures to expand consumption to boost the economy in H1 2022. Under the proposition of effective and accurate covid-19 prevention and control, the NDRC suggested seizing the opportunities of the traditional shopping season for CNY and Lantern Festival and adjusting to people's demand for the better quality of products in order to unleash consumption potential and get first quarter economic conditions off to a smooth start. Several offshore market players stockpiled their inventories ahead of the holidays in China, fearing the supply shortage, high production, and freight charges, due to which the demand has been slowed down from the international market recently.

As per ChemAnalyst, the prices of Glucosamine are likely to decline in the Chinese domestic market due to lower demand and sufficient stocks with buyers. The FOB Qingdao discussions for Glucosamine were assessed at $7645 per MT on the week ending February 11th. Physical trades in major northern ports, including the Tianjin port, have been constrained after Beijing warned it is going to take action against price manipulators and hoarders. China has also renewed its campaign to prevent the prices of raw materials from overheating while it takes steps to stimulate the faltering economy. Coal and iron prices, in particular, are in the cross-hairs as they have escalated in the past few weeks, which will highly impact the production costs, despite the manufacturing slowdown that usually precedes the Lunar New Year holiday and constraints on industrial production due to the Winter Olympics.