The standoff that held WPC80 still through July and August has broken, and it has broken downward. Prices fell quickly in both Europe and the United States over the past two weeks. Buyers worldwide have essentially stopped purchasing, pointing to reformulation and to carry-over stock from Q3, and have waited for offers to come to them. That worked. Vesper expects WPC80 to keep weakening in the coming weeks.
The United States has been the main driver. More spot production capacity has come online and pushed additional volume onto the market, and US manufacturers are actively chasing export sales. Cheaper US offers then made European and Asian buyers more hesitant again, and they are holding off as long as they can in the hope of lower prices still. The awkward part for sellers is that lower prices have not yet produced more trading. When buyers do return, they are more likely to cover smaller volumes than to commit to whole quarters.
Where the decline runs out of room
MPC 85 is the reason this has a floor. It remains very firm globally, with barely any European offers left for Q4 and only slightly better availability in the US at a significant price. Buyers shifting out of whey proteins and into milk protein concentrates keep lifting demand, and tighter liquid milk markets in Europe and the US are pushing its cost base up at the same time. The gap between the two products is now closing from both directions, with WPC80 coming down and MPC 85 climbing, and as WPC80 approaches that level the substitution economics turn back toward whey protein.
Whey protein isolate has held up better. Few producers make it for stock, since most only run it when a premium over WPC80 is paid, and the growing number of variations such as clear whey keeps the market tighter. Buyers are taking the same wait-and-see approach, but there is little pressure on producers to move Q4 or Q1 volumes cheaply. The US market has held up particularly well. With WPC80 falling faster, the premium between the two is widening again.
The rest of the complex looks steadier. Sweet whey powder is firm across both regions, with plenty of Q4 volume still to cover and strong export demand for US dry whey. Production keeps growing on the back of heavy cheese output, with Germany up 6.1% and the US up 8.32% year to date against last year. Lactose and permeate lost a little at the top of the range as some offers stopped finding buyers, and GDT lactose fell 4.3% from the previous event to $1,845/mt as European standardization demand slows into autumn.
The question WPC80 buyers are really asking is not how far it falls. It is at what price everyone steps back in at once.
