MSG: negative factors lead the market prices fell in the third quarter

The third quarter of the monosodium glutamate market average price continued to fall temporarily did not appear inflection point

Quarter of the MSG market prices continued to fall, with the price trend of the same period last year. Zhuochuang Information monitoring data show that as of September 20, the average price of 40 / 50 / 60 major enterprises in the third quarter of 2024 was 7413.4 yuan / ton, down 4.1% month-on-month and 17.2% year-on-year. The main reason is that the fundamental pressure of supply and demand in the domestic MSG market is still large, the upstream raw material prices fell continuously, the support of the cost end weakened, dragging down the overall downstream procurement mentality, the market bearish factors leading the MSG market, the market price focus is declining.

Peak season cash less than expected demand improvement is limited

Entering the "golden nine" traditional sales season, the third quarter of the MSG market sales situation is limited, in the background of continuous price decline, the circulation market just need to buy, maintain the safety inventory level, the market volume is difficult to enlarge. Industrial users have signed contracts in the fourth quarter, the price reduction psychology is obvious, the overall purchase and sales performance of the market is not as expected in the peak season, it is estimated that the sales volume of MSG in the third quarter is 559,000 tons. Due to the obvious price advantage and the export situation is good, the export volume of MSG in August was 83,000 tons, an increase of 18.1% from the previous month and 30% from the same period last year. The total volume of the third quarter is expected to be 231,000 tons, an increase of 15.1% year on year.

On the supply side, the main MSG enterprises maintained normal production in the third quarter. Although the production enterprises in Shandong, Inner Mongolia and other producing areas were unstable, the impact was very limited. Zhuochuang Information monitoring data showed that the total output of MSG in the third quarter of this year is estimated to be 813,000 tons, up 1.4% from the previous quarter.

In the third quarter of some raw material prices continued to fall MSG enterprise cost support weakened

In the third quarter, monosodium glutamate two major raw materials corn and soda ash prices showed a continuous downward trend. Near the listing of new grain, the intermediate inventory supply is still high compared with last year, the pressure of old grain shipment is increasing, and the corn price continues to fall, gradually approaching the low point of the year. As of September 18, the average price of corn in Northeast China in the third quarter was 2267.93 yuan / ton, down 26.81 yuan / ton, or 1.17%, from the second quarter; or 16.69%, down 454.31 yuan / ton from the same period last year. In the third quarter, the downstream demand of soda soda did not improve significantly, and the contradiction between supply and demand in the market was difficult to ease, and the price decline did not stop the main downstream did not rush to buy, and the intention to lower the price of soda ash was not reduced, leading to the gradual decline of soda ash price. As of September 20, the light monthly national average price was 1444.7 yuan / ton, down 15.5% from the same period of last month, and the average price in the third quarter was 1694.6 yuan / ton, down 18% from the previous month. Corn and soda ash prices fell sharply to drive down the cost line of MSG. Specific data, as of September 20, the average production cost of major enterprises of MSG in the third quarter was 7779.2 yuan / ton, down 1.7% from the previous quarter.

The fourth quarter of the negative impact is still obvious prices or continue to bottomIn the fourth quarter, considering the gradual increase of new production capacity in Heilongjiang, the active cost reduction of enterprises and the suitable fermentation of temperature drop, the supply of MSG industry is still expected to grow, and the pressure on the supply side is difficult to reduce. On the demand side, in the weak market, downstream enterprises enter the market cautious, wait-and-see sentiment is strong, more continue to buy low prices just need to buy, not much to the market support in the short term. However, as the price of MSG has fallen to the low point in recent years, due to the low level of downstream hoarding in the early stage, the downstream procurement volume may increase.

In terms of cost, the periodic imbalance between supply and demand in the corn market, combined with the supply pressure of new grain market, makes the market price of corn difficult to change the downward trend in the near future. However, with the approaching of the corn harvest time in the producing areas, the expected production reduction in the main production areas may be gradually realized. Due to the impact of the climate, the corn grain is mainly wet grain in the initial stage, and the price of high-quality breeding grain is tight, and the corn price is still expected to rebound in stages. At the bottom of the raw material price has appeared, the later monosodium glutamate market bearish mentality will also be improved.

On the whole, the short-term raw material end prices are still expected to continue to fall, and the MSG enterprise cost pressure continues to reduce. In addition, with the release of new production capacity in the fourth quarter, the supply pressure of MSG market is difficult to appear significantly improved, or lead to the continuation of MSG prices of a small downward trend, but the decline will gradually slow down. Attention should be paid to on the weather of raw corn harvest period, the intention of basic grain selling and the overall supply and demand changes of MSG.(Zhuochuang Information)