What are the effects of the continuous decline of lysine prices on producers in China?
There are three levels of lysine manufacturers in China in terms of the production cost. Those small-scale ones were associated with a production cost of at least RMB16,000 per tonne. We believe these producers have exited the industry. The middle level are more efficient producers with a cost of RMB12,000 to RMB 13,000 per tonne. They have either reduced the production capacity of lysine or switched their production into other amino acids. Global peers enjoy much lower cost, with Global Bio-chem’s production cost at around RMB7,000 per tonne.
