Methionine: Short-term benefits remain, but long-term pressures are emerging.

Rising Risks of Industry Supply-Demand Imbalance and Competition While industrial capacity expands and domestic substitution accelerates, deep-seated problems in the methionine market have gradually emerged, evolving into core bottlenecks restricting the high-quality development of the industry. First, the mismatch between market supply and demand stands out, with a stark divergence between short-term and medium-to-long-term market trends. In 2026, constrained by overseas capacity limits and routine maintenance of industrial facilities, the market will face tight supply and robust price resilience, yet the imbalance between supply and demand will keep building up over the medium and long run. Calculations by Longzhong Information show that a massive amount of new domestic capacity will be launched before 2030, which may drive a more than 50% expansion of global capacity and continuously squeeze profit margins across the industry by then. Second, the industry suffers from fierce homogeneous competition and a prominent concentration of low-end production capacity. Most newly added domestic capacity currently focuses on general solid methionine, resulting in a monotonous product mix, while high value-added products such as hydroxymethionine and coated functional methionine account for a low proportion of total output. The majority of small and medium-sized enterprises seize market share through low-cost expansion without proprietary core technologies or differentiated products. This leads to an overall low added value of industrial products, mounting pressure on aggregate industrial profits, and the industry may enter a low gross profit margin development phase in the future. Third, risks of market volatility are intensifying, and the industrial chain lacks sufficient risk resistance. Methionine prices are affected by multiple factors including geopolitics, raw material costs, maintenance cycles and livestock breeding market conditions. The roller-coaster price fluctuations witnessed throughout 2026 fully demonstrate the instability of the industry. Meanwhile, the industry experiences sharp swings in inventory cycles. Downstream feed manufacturers mostly adopt demand-based procurement and low-inventory operation models, while upstream producers bear dual risks of inventory backlogs and price declines. Poor coordination across the industrial chain results in weak overall risk resilience. In addition, the industry faces mounting pressure for green transformation. Methionine production falls under fine chemical manufacturing, which generates pollutant emissions during production processes. With the implementation of China's "dual carbon" goals and increasingly stringent environmental supervision, small and medium-sized production capacities are confronted with surging pressure for environmental rectification and technical upgrades. Some outdated production units face output cuts or shutdowns due to high energy consumption, which further compresses corporate profit margins and accelerates the phase-out of small and low-efficiency capacities. # High-end and Differentiated Development as the Transformation Direction Based on the current market landscape and a comprehensive analysis of capacity rollouts, demand shifts and industrial policies, the methionine industry is expected to fully enter a new stage featuring structural optimization and landscape reshaping between 2026 and 2027. In the short term, the market will maintain a pattern of tight supply and high-level volatility in the second half of 2026. Restricted overseas capacity recovers sluggishly, and regular maintenance of domestic facilities limits the growth of effective market supply. Concurrently, the peak breeding season for downstream livestock industries will drive steady growth in end-market feed demand, supported by strong raw material costs. Methionine prices are likely to remain at high levels with minimal risk of sharp declines, and overall industrial profitability will stay stable. Over the medium and long term, the industry will enter a new phase of orderly capacity release and reshaped competitive landscape. Starting from the second half of 2026, newly added domestic capacity will come online gradually, lifting global methionine supply and gradually breaking the current tight balance between supply and demand. From 2026 to 2027, the industry's demand-to-capacity ratio will remain within a reasonable range above 75%, and the central price level will stabilize at a historically rational range. However, the concentrated commissioning of new capacities after 2028 will completely reverse the supply-demand balance of the industry, shifting market competition from capacity expansion to comprehensive competition centered on costs, technologies and product differentiation. Accordingly, upgrading toward high-end and differentiated products will become the mainstream trend. Driven by the popularization of high-end and precision breeding models downstream, demand for high-grade feed continues to rise, squeezing profit margins for traditional general-purpose methionine, while market demand for functional and high-end methionine products surges rapidly. Longzhong Information forecasts that leading enterprises will ramp up R&D investment in the future, deploy high-end products such as liquid methionine and sustained-release methionine, extend industrial chains, boost product added value and optimize product portfolios. Low-end industrial capacities will be phased out at an accelerated pace, market resources will keep concentrating on leading enterprises, and industrial concentration will rise further.