Global Methionine Prices Set to Surge by November 2024 Amid Rising Demand and Supply Constraints

Methionine prices are poised to rise globally by the end of November 2024, with significant impacts expected in major markets. Industry analysts attribute this upward trend to a combination of constrained supplies and robust demand from end-user sectors, including animal feed and pharmaceuticals.

The expected increase in Methionine prices in China is attributed to a combination of seasonal and industrial demand factors. As winter approaches, the livestock feed sector typically ramps up production to meet heightened seasonal demand, driving up consumption of Methionine, a key nutrient in animal feed. This surge in feed production, coupled with the anticipated expansion of China's Purchasing Managers' Index (PMI) in November, indicates an increase in industrial activity and manufacturing output. As various industries ramp up production, there is likely to be additional demand for Methionine, which is used in several manufacturing processes. At the same time, limited availability of Methionine, partly due to supply chain constraints, is expected to further elevate prices.

Germany, a significant importer of Methionine, is facing mounting pressure from rising transportation costs, which are set to drive up prices in the coming months. After a dip in mid-October, Asia-Europe freight rates saw a sharp 30% increase in early November, attributed to General Rate Increases (GRIs) imposed by shipping carriers. Looking ahead, these costs are expected to rise further in December with additional GRIs tied to the early surge in demand ahead of the Lunar New Year. For German buyers, this situation is compounded by seasonal demand increases in the livestock feed sector, which traditionally peaks toward the end of the year. As transportation expenses rise, these costs are likely to trickle down through the supply chain, ultimately leading to higher Methionine prices in Germany as importers pass on the burden of increased shipping fees to the market.

The United States Methionine market is also bracing for higher prices, influenced not only by rising demand but also by the recent resolution of the International Longshoremen's Association (ILA) strike. The strike, which had caused significant congestion and delays at key East and Gulf Coast ports, was a major disruptor for Methionine import flows from Asia. While the strike's resolution has restored port operations, the backlog of shipments will take weeks to clear, prolonging supply chain inefficiencies. Importers are now rushing to replenish inventories, which had dwindled during the strike, driving up spot prices for Methionine.

According to ChemAnalyst's analysis, Methionine prices are projected to stay elevated, driven by a combination of fluctuating production levels, rising transportation costs, and persistent demand. In response to this volatility, market participants are expected to adopt more cautious approaches. Some companies are opting to build up their inventory levels in anticipation of further price increases, ensuring they are well-stocked to manage supply disruptions. Meanwhile, others are pursuing long-term supply contracts, which provide greater stability and help mitigate the risks associated with price fluctuations, allowing for more predictable and manageable costs moving forward.