In 2014, the domestic production capacity of lysine was 2.05 million tons, an increase of 90,000 tons compared with last year. In 2014, the domestic production of lysine was 960,000 tons, a decrease of 110,000 tons compared with last year. The rapid growth of lysine production capacity resulted in a significant decrease in the operating rate. In 2014, the domestic consumption of lysine was approximately 680,000 tons, which was the same as last year, and the demand growth stagnated. The domestic lysine market is still showing an oversupply situation, leading to a downward trend in the market.

In the past two or three years, the industry has continued to be in a state of loss, production companies have struggled to operate, and closed and closed companies have continued to appear. Not only are most small companies struggling with life and death, but large companies have not been spared. Companies such as Yipin and Dacheng Facing the fate of being integrated, the industry has entered a stage of shuffling.

1. Global lysine industry status

1. Obvious excess capacity

In 2014, the global lysine production capacity was about 3.44 million tons, the demand was only 1.85 million tons, and the excess capacity was about 1.59 million tons. When supply is significantly greater than demand, the industry's operating rate is low.

2. Production capacity distribution

In 2014, China's lysine production capacity will account for 61% of the world's total production capacity. Compared with 2013, China's lysine production capacity will account for 59% of the world's total production capacity, an increase of 2%. In 2014, China still added some lysine companies, such as Ningxia Wansheng, Zhucheng Dongxiao, Zhaodong Chengfu, etc. In 2014, China increased its lysine production capacity by 90,000 tons, an increase of 9%. In 2014, Europe added 40,000 tons of new capacity, an increase of 33%.

3. Rewrite the competitive landscape

In 2013, Changchun Dacheng's lysine production capacity was approximately 580,000 tons, which was higher than CJ's 530,000 tons lysine production capacity and ranked first in the global lysine industry. In 2014, the lysine production line of the Dachangchun plant was abolished, and the lysine production capacity dropped to 430,000 tons, which was the second place lower than CJ.

In November 2014, Meihua's lysine production capacity will reach 480,000 tons after the acquisition of Yipin, surpassing Changchun Dacheng and lower than South Korea's CJ, ranking second in the global lysine industry.

Based on the global industry's total production capacity of 3.44 million tons, the global share of plum lysine production capacity will increase to 15% after the merger.

Meihua’s combined lysine capacity of 480,000 tons includes its own 210,000 tons and Yipin’s existing 270,000 tons. Among them, the second-phase lysine project of Yipin Chifeng is under preparation. After completion, it will add 80,000 tons of lysine. The combined annual production capacity of lysine will reach 560,000 tons, which will surpass Xijie to rank first in the world.

4. Weak global lysine consumption

    According to statistics, the global feed production in 2014 decreased slightly compared to 2013, mainly due to the downturn in China’s macroeconomic economy and the sluggish aquaculture industry. Feed consumption fell by 191 million tons, down by about 6 million tons from last year. Therefore, the demand for lysine increased. Restricted.

2. Status Quo of China's Lysine Industry

1. Overcapacity and serious shortage of operating rate

In 2014, China's lysine production capacity increased to 2.05 million tons, and the output reached 960,000 tons, but the operating rate was only 47%, which shows that the industry's capacity is obviously in excess.

2. Increased industry concentration

In 2014, the production capacity of China's lysine industry was about 2.05 million tons. After Meihua acquired Yipin, the production capacity of lysine surpassed Changchun Dacheng, ranking first in the industry, accounting for approximately 22.5% of the production capacity. Secondly, Changchun Dacheng has a market share of 20.4%, followed by Xijie’s market share of 10.4%. The three companies accounted for 53% of the market.

3. Imbalance between supply and demand, the lysine industry has been in a state of loss for a long time

Since the end of 2011, the lysine market has basically been in a continuous decline. China's lysine loss has lasted for two years, and even once lost 2,874 yuan/ton. At present, the profit situation has improved, but it has not yet escaped the dilemma of loss. The market loss is about -100 yuan/ton. Mainly affected by the suspension of production of Dacheng, Xijie, Yipin and Golden Corn.

3. The future development trend of lysine industry

1. Industry reshuffle and integration will continue

Although the domestic industry is highly concentrated, with only 7-8 major production companies, their production capacity has been severely surplus. Only the production capacity of only three companies fully meets the demand, which means that the industry integration has not yet ended and will usher in a period of intense integration. Therefore, it is inevitable that the lysine industry will reshuffle and integrate in the next 2-3 years. Through the advantages of the fittest, it is likely that 3-4 large-scale production companies will eventually remain.

2. Weak demand growth and limited export space

With the improvement of the economic level, people's consumption patterns are changing, and the growth rate of poultry meat production and consumption is gradually slowing down. Therefore, the feed consumption tends to be saturated, and the domestic demand for lysine slows down and even shows negative growth.

Due to the expansion of the production capacity of Korean companies such as Baiguang, CJ, Ajinomoto, and the disadvantage of my country's corn price, multinational companies will squeeze the market share of Chinese lysine companies exporting to the Americas and the EU. At the same time, due to technical patent issues, disputes over intellectual property rights between Ajinomoto and Dacheng, Xijie and Yipin will trouble the development of overseas markets.

    3. Fierce market competition, weak market consolidation,

Although the current price has rebounded, the imbalance between supply and demand in the industry is serious, coupled with the impact of sluggish feed demand, so market competition is still fierce. For a period of time, the market is unlikely to see any significant improvement, and the market is dominated by weak consolidation.