Core Viewpoint - The egg market is experiencing a continuous decline in prices despite being in the demand peak season, primarily due to supply-demand imbalance and pessimistic market sentiment [1][3]. Supply and Demand Analysis - The current supply of laying hens is at a historical high, with a stock of 1.35557 billion hens as of July 2025, reflecting a 1.19% increase month-on-month and a 6.197% increase year-on-year [4]. - Analysts indicate that the demand for eggs has not picked up as expected, leading to a situation where the peak season is not performing as anticipated [3][4]. - The ongoing low prices have resulted in egg production being below cost for nearly four months, which has dampened the willingness of producers to restock and increased the inclination to cull older hens [5]. Market Sentiment and Future Outlook - Market sentiment remains pessimistic due to oversupply, high inventories, and weak demand from downstream buyers, particularly with the delayed Mid-Autumn Festival affecting purchasing intentions [6]. - Despite the current challenges, there is potential for demand to rebound as the holiday approaches, but expectations for significant price increases are tempered by the high supply levels [6]. - Analysts predict limited upward movement in egg prices due to the ongoing high stock levels and unresolved supply-demand conflicts [6].

Core Insights - The egg price is continuously declining, leading the egg-laying industry into a loss situation, despite an increase in the enthusiasm for replenishing stock among producers [1][2] Group 1: Market Dynamics - In the first half of 2025, the egg market is experiencing a downturn, with producers facing losses, yet the sales of commercial layer chicks increased by 20% year-on-year from January to April [1] - The cash flow cost for egg-laying operations in Hebei is between 2.6 to 2.7 yuan per jin, with prices dropping below this cost since early June, indicating a critical cash flow loss situation [2] - The market sentiment is pessimistic regarding short-term price increases due to high production capacity, with many producers and traders planning to stockpile eggs at low prices in anticipation of a price recovery before the Mid-Autumn Festival [3] Group 2: Production Challenges - The industry is facing a cash flow loss threshold, with daily losses of approximately 500 yuan for every 10,000 hens, highlighting the financial strain on producers [2] - There is a notable increase in the rate of old hen culling, but the overall resilience of producers is evident, as many are opting for molting strategies instead of panic culling [2] - The market is experiencing a supply-demand imbalance, with small-sized eggs being oversupplied and facing sales pressure, while larger eggs are in short supply [3] Group 3: Health Issues - The prevalence of chicken diseases has increased, with infection rates in some areas reaching 30%, leading to a significant drop in egg production rates among affected flocks [4] - The market price for non-productive chickens has decreased from approximately 5 yuan per jin last year to 3.6 yuan per jin, exacerbating the financial pressures on producers [4]

Core Viewpoint - The continuous decline in egg prices is attributed to high production levels and weak demand, leading to a supply-demand imbalance in the market [1][3][4]. Group 1: Current Market Conditions - As of May 20, the average wholesale price of eggs in China was 7.83 yuan/kg, down 5.9% from 8.32 yuan/kg on April 24, and down 27.8% from 10.84 yuan/kg in September 2024 [1]. - The high inventory of laying hens, approximately 1.13 billion, has resulted in a sufficient supply of eggs, contributing to the downward pressure on prices [1][3]. - The market saw a temporary increase in egg prices due to pre-holiday stocking during the "May Day" holiday, peaking at 8.32 yuan/kg on April 24 before declining again [1]. Group 2: Impact on Egg Producers - The egg production industry has been in a loss-making phase since February, with losses exceeding 0.6 yuan per kg of eggs produced [3]. - Rising feed costs, particularly for corn and soybean meal, have further strained the profitability of egg production [3]. - The majority of egg-laying hens are currently in a high production phase, maintaining a supply surplus in the market [3]. Group 3: Future Market Outlook - The egg prices are expected to remain low in the latter part of Q2 due to stable production levels from increased replenishment of laying hens and weak consumer demand [4]. - The third quarter is traditionally a peak season for egg consumption, which may lead to a potential recovery in prices as demand increases from various seasonal events [4]. - There is a possibility of a turnaround in the egg production sector as producers may eliminate outdated production capacity, potentially leading to profitability in Q3 [4].