Additives market up and down?
The revised legislation on the maximum vitamin A content of animal feed that has come into force in the European Union is now being implemented at premix and compound feed manufacturers. The significantly lower usage rates support the current sufficient availability in the vitamin A market. The consequence: no further stimulation of the price level. Dr. Elke Müller-Mußmann, Head of Purchasing/Retail for animal feed special products at AGRAVIS analyses the market.
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- Dr. Elke Müller-Mußmann
Dr. Müller-Mußmann, what is the situation with regard to vitamins more broadly speaking?
Dr. Elke Müller-Mußmann: The price war between the Chinese and European producers for dominance in the vitamin E market continues. For consumers, the opportunity may exist for lower prices, as individual retailers are prepared to grant further concessions for larger volumes. It remains unclear how long this downward trend will continue, though; indeed, it remains to be seen who can hold out longer at this price level.
Significant surpluses in the production of vitamin C lead to very low price levels. For the producers, the focus is on securing their sales volumes. Which is why the market remains weak.
The situation is a different one for vitamins B1, B2 and B6. In recent weeks, prices have experienced rapid growth, whereby there could be supply bottlenecks in the short term. The cutbacks in production capacities prompted by government guidelines in China led to a great deal of turbulence. We already experienced a similar situation in the first half of the year with folic acid, though a complete reversal has been achieved here; the market is constantly falling, a balance is being restored between supply and demand.
What is the market situation in other areas?
Dr. Elke Müller-Mußmann: A glance at the amino acids shows that the producers' financial losses brought an end to Lysin's price spiral; the prices for this now tend to be stable. With regard to Methionin, the quotations are significantly lower; the market is currently quiet with little purchase interest. Retailers continue to attempt to reduce their stock. A similar situation exists for Tryptophan: sufficient stock, good production volumes, fluctuating prices. In contrast, Threonin is experiencing a slight upwards trend. Time will tell whether the increase in production capacities will provide new momentum.
And what is the long-term outlook?
Dr. Elke Müller-Mußmann: Contrary to expectations, the considerable reduction in volumes of a major zinc producer did not impact the market; competitors were able to balance out the situation without any problems, the market remains quiet. In contrast, demand for copper rose slightly. However, the outlook here tends more towards a decrease in demand in light of the economic development in China. There are no changes for the phosphates. It remains to be seen whether the start of the 2016 fertiliser season will bring momentum to the balanced market.