1. Market Review This Week: Leading Companies Continue to Raise Order Prices with Widening Increases
This week, MSG companies' order prices initially stabilized before rising. On Thursday, leading companies increased their quotes by 200 yuan/ton, with the increase widening, reflecting a generally unified upward trend in upstream prices. The mainstream transaction price for bulk-packaged MSG (40-60 mesh) from major MSG companies was 6700-7200 yuan/ton, while the mainstream intended price for 80 mesh was 6350-6650 yuan/ton. Prices for bulk-packaged MSG in sales regions gradually increased, with new high-priced orders being temporarily replenished only as needed. On March 26th, the mainstream market price for bulk-packaged 40 mesh MSG in sales regions was 6900-7150 yuan/ton, with some smaller brands offering prices 200-300 yuan/ton lower. As of Thursday, the average price of bulk-packaged 40 mesh MSG in sales regions this week was 7016.3 yuan/ton, up 0.94% from last week's average price and down 4.13% from the same period last year.
2. Driving Factors Analysis: Continued Loss Pressure on Enterprises Drives MSG Prices Up
This week, the MSG industry's operating rate was 87.4%, with a weekly output of 66,700 tons, remaining stable compared to last week. Leading companies in the industry maintained relatively stable operating rates, with supplies from production areas gradually shifting to downstream markets. Shipments of some crystal products were slower than usual, and companies maintained a bullish stance on prices. Driven by the continued price increases from leading companies, the downstream market sentiment was generally positive, with distributors gradually replenishing their stocks as needed. However, downstream buyers remained cautious about the continued price increases, with high-priced transactions decreasing compared to the previous period. A wait-and-see attitude intensified, and purchasing behavior was mainly focused on replenishing immediate needs.
According to data from Zhuochuang Information, as of March 26, the average transaction price of 40-mesh monosodium glutamate (MSG) in Inner Mongolia this week was 7040 yuan/ton, up 1.1% from the average price last week; the average weekly purchase price of corn in the region was 2261 yuan/ton, up 0.1% from the average price last week; the average purchase price of soda ash was 1295 yuan/ton, stable compared to the average price last week; the average price of coal was 543.5 yuan/ton, up 2.8% from the average price last week; the price of sulfuric acid was 1402.8 yuan/ton, up 11.1% from the average price last week; the average raw material cost per ton of MSG this week was 7776.2 yuan, up 1.7% from the average price last week; without hedging by-products, the enterprise profit was -1736.2 yuan/ton, an increase of 43.4 yuan/ton in losses compared to last week. After hedging by-products and compound fertilizer, the theoretical loss per ton of MSG was 536.2 yuan. Although MSG prices rose this week, costs continued to increase. Currently, the price increase in MSG has not yet covered the increase in raw material costs, so theoretically, companies are still operating at a loss.
3. Market Outlook for Next Week: MSG Prices May Continue to Rise
Domestic MSG prices are expected to remain relatively strong next week. Costs remain the core support. Rising prices of major energy raw materials such as coal and sulfuric acid, coupled with geopolitical factors, have kept MSG companies under high cost pressure, and the industry remains in a loss-making phase. Leading companies are holding back sales and have a strong desire to raise prices, providing a solid floor for prices. From a supply and demand perspective, the MSG industry is highly concentrated, with leading companies dominating the market by maintaining prices. Downstream demand is steadily increasing, and distribution companies are replenishing stocks as needed, but there is a clear upper limit to their acceptance of high prices, with procurement mainly based on just-in-time. In summary, cost support and rigid demand are favorable factors, but high downstream prices are creating upward resistance. It is expected that the mainstream MSG price will be slightly higher next week, continuing the upward trend. The average price of 40 mesh MSG in Inner Mongolia is expected to be 7,150 yuan/ton next week, an increase of 110 yuan/ton compared to this week. The price range of 40 mesh MSG in sales areas is expected to be 7,000-7,250 yuan/ton.
Source: Zhuo Chuang Information)