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Along with the Increasing Pressure of Oversupply, Lysine Prices Would Continue to Descend

China Agriculture Report By CnAgri2018-05-30 09:44:05China Agriculture Report Print In April, lysine prices kept decreasing. In middle May, the average market price of home-made 98.5% lysine decreased to RMB 7,500-7,900/MT, RMB 800/MT less than that in late April; the average quotation of home-made 70% lysine was around RMB 4,300/MT, RMB 400/MT lower than that in late April. Judging from supply-demand relation, the pressure of lysine supply would increase and the prices would continue to go down:
First, the supply pressure is relatively great. Along with the increasing of companies newly built and expanded in the last two years, lysine capacity in 2018 would reach 3.2 million MT, 1 million MT higher than that of last year and accounting for 65% of the global total. Since the third quarter, new-added capacity has been released on the market, further increasing the supply pressure.
Second, corn material prices dropped. Corn auction volume in May ranges at 6-8 million MT every week. Along with the increasing of warehouse-out, corn faces great periodical supply pressure, and corn prices also enter a period of declining, directly influencing lysine quotations. 
Third, the demand is weak for a long time. Along with low hog prices, the farmers witness a serious loss and the stocks are decreasing. April hog stocks decreased by 0.8% month on month and 1.5% year on year; fertile sow stocks were down 1.4% month on month and 2.1% year on year. Besides, restricted by a ban on exports of China’s lysine products released by Russia, China’s lysine product exports in the first quarter of 2018 decreased by nearly 5% year on year. 

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