“Contracting for 3Q, and in many cases 4Q, is largely completed. Slower downside and sideway trading is expected for 2H 2021 for most categories.
“Freight and input price inflation for oil, natural gas, corn, corn starch, soybeans, softs, or metals will pose a natural floor to manufacturers' prices. However, many of those commodities have retreated from the highs seen during an unprecedented ‘supercycle’ rally in the first half of the year,” Stefan Schmidinger, partner, Kemiex, told us.
And a somewhat stronger US dollar against Yuan offers some short-term relief, he added.
Ingredient manufacturers in China have been reporting 1H financials, showing a divergent picture: amino acids producer, Meihua, and vitamin B1 maker, Huazhong, posted strong results while profits at vitamin manufacturers, Brother and Xinfu, dropped significantly, reported Kemiex.
For the second half of this year, markets are closely following the dynamic freight situation, vitamin A developments including BASF's new plant, and new and upcoming supply from several Chinese vitamin producers, along with vitamin C production trends, with rumors of lower prices for 2022 delivery, along with new projects pegged.
Kemiex also expects fallout from the US anti-dumping ruling on methionine.
Freight outlook
Ocean freight rates have seen another strong surge from June onwards, and coupled with high US retail demand and low inventory levels ahead of peak shipping season – August to October – rates are forecast to stay at elevated levels until around June 2022, according to the Swiss platform.
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July 22, 2021 at 09:48PM
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