The market prices of methionine and VE have continued to rise recently, with cumulative increases of 85% and 34% since the beginning of the year respectively. The core driving force of this round of price increases is very direct, that is, overseas production capacity disruptions coupled with soaring raw material costs. At present, Evonik Singapore and Japan's Sumitomo Chemical have declared force majeure to suspend production, causing nearly half of the global methionine production capacity outside China and the United States to face severe challenges. At the same time, due to the skyrocketing prices of energy and raw materials such as European natural gas, the production of major European VE plants, which account for 40% of the world's share, has also been significantly affected.

The key to this marginal change is that it completely opens up the profit elasticity of domestic leaders. After all, both methionine and VE belong to a typical oligopoly structure, and the leading companies have extremely strong pricing power. In addition, the downstream is mainly oriented to industries with immediate needs such as feed, and the cost ratio in the terminal formula is extremely low, so the price transmission is extremely smooth. In the context of overseas energy and raw materials rising much faster than domestic ones, the supply chain stability and cost advantages of China's production capacity have been significantly amplified. Not only will it enjoy the dividends of price increases, but it is also expected to undertake overseas transfer needs.

Looking forward, the market is more concerned about how far this boom can go. In the short term, breakpoints in overseas supply chains are difficult to repair quickly. If the shutdown time is prolonged, it is easy to trigger panic stocking in the downstream, further pushing up product quotations. At the transaction level, domestic leaders such as Xinhecheng, which has a huge production capacity base, are the core beneficiaries of this cycle, but some price increase expectations may have been lost on the market. The next verification points that really need to be watched closely are: first, the actual progress of the resumption of production by major overseas manufacturers and the lifting of force majeure; second, the signing price and commercialization pace of subsequent long-term export orders by domestic major manufacturers.