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MARKET TRENDS

Chinese

MARKET TRENDS By Tony Xue

General Manager, ingredientsonline.com Shanghai

ACESULFAME K FCC Prices are reasonable due to market stability for quite some time. Currently, production capacity is beyond demand. The global demand is around 16,000mt and each factory keeps their own market share with planned output. The market is not likely to change any time soon.

ASCORBIC ACID SERIES Since our last update, prices have been rising now for more than eight months. Supply is unstable and prices continue to rise due to the sharp cost increase of corn and mining, plus the factory shutdown due to maintenance and environment controls. The environment control will become even more strict and on-going which will continue to affect the output from the major factories in Hebei and Liaoning Province. The upcoming shutdown for maintenance during the hot summer months will keep the supply short. The factories have experienced deficit for a long time due to the low market in the last few years and are trying to make ends meet. Their chances to lower the price to gain market share are slim. On the other hand, we are seeing newcomers stepping into Ascorbic Acid production and new factory output will affect the market, but overall, the price is still very firm and continues to rise. Meantime, prices of Vitamin C derivatives are on a rise accordingly.

CARNITINE Due to the government’s pressure for environment control, the factories in Liaoning Province have all shut down production. Prices have been increasing since April and most likely will continue for a few months.

CHOLINE BITARTRATE AND BETAINE ANHYDROUS Prices are currently stable but may increase slightly in the next few months due to: 1. Part of the starting material is affected by the raw oil price. 2. The cost of environment control and labor cost.

CITRIC ACID As the most common food additive, the price is currently stable. The overall demand has increased slightly and the supply is very stable and sufficient.

COQ10 During April and May, one of the factories placed a hold on pricing due to environment control and production cost increases. The other two major factories increased the price by 30% and lead-time to three weeks or even longer based on production.

CREATINE MONOHYDRATE The supply and demand is balanced now and the price is stable. However, the price may increase slightly due to: 1. Some factories have unstable output due to relocation and operation issues causing low inventory. 2. Some factories are trying to enter the market with low pricing but the result is not as good as expected. These factories will need to increase the price slightly to cover cost.

CURCUMIN 95% EXTRACT The harvest this year is slightly less than last year. Supply was tight in the first quarter but currently the supply is back to normal and stepby-step pricing appears to be stabilizing. 14

INGREDIENTSONLINE.COM • SUMMER 2017


MARKET TRENDS JINAN JIUAN ESTER CHEMICAL CO., LTD

DHEA DHEA is currently produced with two starting material sources, 4-Androstenediol and Wild Yam. The 4-Androstenediol source DHEA is now stable with ample supply. Due to the shutdown of several factories, the Wild Yam source is rising slightly. Overall, prices are stable, but if customers need specifically sourced DHEA, prices might be a little different.

GABA The foggy weather/air pollution in Northern China is quite serious and the government is taking great measures including shutting down and/or controlling factories output. GABA production is affected by this move and current supply is tight, and it is likely that prices will continue to rise.

GAMMA ORYZANOL

LEADING SUPPLIER OF HIGH QUALITY CHOLINE, BETAINE, DMAE BITARTRATE AND PYRUVATE PRODUCTS

Betaine Citrate

Choline Dihydrogen Citrate

Betaine HCL

Creatine Pyruvate

Betaine Monohydrate

DMAE Bitartrate (L&DL)

GLUCOSAMINE

Calcium Pyruvate

Potassium Pyruvate

The price of the starting material, Chitosan 90-95%, may increase slightly due to environment control but currently the price of Glucosamine remains stable.

Choline Bitartrate (L&DL)

Pyruvic Acid

Due to the starting and accessory material cost increases, the price has increased slightly in the last few months. It now appears to be stabilized and not likely to increase again. This ingredient is widely recognized in the market for its health benefits and the factory has increased its production capacity.

GLYCINE

Betaine Anhydrous

Sodium Pyruvate

Choline Chloride

The price is increasing in China, however, the price in the U.S. is not changing because of the anti-dumping laws. The supply and demand is balanced and the price stays firm.

INOSITOL Inositol is currently stable at a low level. Demand has increased slightly but there is a stable supply.

INULIN The market remains hot for dietary fiber where Inulin plays a very important role. Prices will remain stable due to adequate output and sales quantity increases each year.

L-CITRULLINE & L-CITRULLINE DLMALATE 1:1 /2:1 From December 2016 through March 2017, the production at different factories was poor and the starting material, L-Arginine, was also in tight supply. Things have improved and prices will remain firm while the supply increases in the next few months.

L-GLUTAMINE Encountering the same situation as with other fermented amino acids, Glutamine output will be downsized in the summer months and price will stay firm.

L-LEUCINE/L-ISOLEUCINE/L-VALINE/ BCAA Hydrolyzed Leucine output has greatly decreased due to environment control. Fermented Leucine, Isoleucine and Valine output will be affected by the hot summer months. The hot weather makes the fermentation process longer and more costly. The price of BCAA will be affected by these three products. Pricing will stay firm and perhaps even rise during the summer.

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MARKET TRENDS

L-LYSINE MONO HCL GRANULAR The price is back to a more reasonable level compared with the first quarter. Factories are still trying to fill the backorders from the first quarter and delivery time may be a little longer.

LUO HAN GUO Prices have comes down a little due to a great harvest last year, and the farmers had a hard time selling their crops at good prices. However, the prices next year might be higher because fewer farmers planted this crop this year. The extraction technology continues to improve and the taste is getting better and better.

MCT The demand for this ingredient is great, particularly in the U.S. market with recent above average inquires. Prices are rising due to environment control, starting material price increases and very few producers for this ingredient.

MELATONIN The supply is a little short due to environment control and factory maintenance. Price remains firm.

MSM The starting material for MSM is DMSO, and due to the price increase of DMSO, MSM prices are rising. One of the only DMSO factories has closed one of their facilities due to technical difficulties. The DMSO

output has decreased, leading to price increases. The factory has been trying to fix the issue for quite some time and it may take even longer. Therefore, MSM prices will continue to rise and the supply might be short in the next three to four months.

N-ACETYL, L-CYSTEIN AND L-CYSTEIN MONO HCL Production has resumed and prices tend to be stable compared to the first quarter. Factories are now trying to fill backorders and delivery time is longer, even up to one month.

N-ACETYL, L-TYROSINE AND L-TYROSINE Supply is still very tight and the pressure from the government’s environment control is greater and greater. Many factories are facing production issues, therefore, prices will remain at high levels for some time or could go even higher.

NIACIN AND NIANCINAMIDE China export and market share have been reduced due to more product coming into the U.S. from India as they capture more market share.

PEA PROTEIN The overall market is hot for Pea Protein products and the factory has a good supply. The price is stable for the time being, however, starch prices are recently on a downward trend. The factory may tend to increase the price of protein (starch and protein are the two major final products from pea). We predict prices may start to increase in the next few months.

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MARKET TRENDS

PHENIBUT HCL

SOY PROTEIN ISOLATE 90%

Starting material costs have increased slightly but the factories are trying to stabilize the market. So far, the supply is somewhat tight while prices stay firm.

The Chinese market is on a rise. It may not be sensed greatly in the U.S. market because U.S. origin material prices are already much higher. The main reasons are:

RESVERATROL Starting material cost increases have led to high levels of Resveratrol prices in the last few months. Supply is still not stable and some factories have shut down production and will watch the market before they resume production.

RIBOFLAVIN 5 SODIUM PHOSPHATE The market is stable due to the supply from several different factories. Pricing has increased slightly but generally speaking, it’s quite stable.

SODIUM HYALURONATE Prices are higher compared with four to five months ago. The factory has increased their investment into the energy system and water treatment system to be compliant with government regulations.

SORBITOL POWDER Based on factory research, the U.S. is the largest market in the world. Prices are stable for now with no environment issue and the supply is sufficient.

1. Costs for soy starting materials continues to increase. 2. Due to environment controls, some small size factories have been shut down. Feedback from these factories is the shutdown and output control and will take place from time to time. Worldwide demand for Soy Protein Isolate continues a steady rise, making this a fast moving product. Exporting from China to the U.S. will continuously rise and production technology in China is catching up with that in the U.S. but with a better-cost structure.

SPIRULINA POWDER Factories have advised that production is stable and there are no issues for environment control.

STEVIA The global demand for Stevia continues to increase but so far this year, the harvest of the Stevia leaves have been good enough for the factory to have enough supply. In the first quarter, the export quantity from China increased by 20% and the factory predicts the price will remain stable in the second half of this year.

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MARKET TRENDS

SUCRALOSE

VITAMIN B1/B6

Prices are decreasing by 20-30% in the U.S. but it’s still on the high side. There are 12 factories of different sizes producing more capacity than the market is demanding. This has created an industry reshuffling and in the next few years you will see some factories stay and some will leave the sucralose market. Pricing will be up and down during this process, but after the reshuffle, prices will be back to a reasonable level.

Production output is not catching up to the high demand due to environmental controls. Prices are increasing slightly and will stay firm.

TAURINE Prices are at a historically high level. The major factories are all very cautious of pricing and busy fulfilling signed purchase orders as their first priority. Lead-time is much longer than before and with summer coming, we think the tight supply and firm price will continue into next year.

THEOBROMINE Highly related to Caffeine pricing, both Theobromine and Caffeine are currently stable for the next three months.

TWINTIGER GLUTATHIONE Thanks to the balanced demand and supply, and also the core technology barrier, the price is currently stable. The factory has good control of its starting material; glucose and yeast, which help to keep future costs stable.

Disclaimer: The forecast information is speculation and opinion only. ingredientsonline.com is providing this as a complimentary service and is not responsible for the information contained in this document.

Price, supply and/or demand remain stable.

VITAMIN B2

Price, supply and/or demand expect to incease.

The factory supply is mostly stable and a new factory is coming online soon. This will make the price a little lower than before, but overall, supply and prices are stable.

XYLITOL The supply of Xylitol is extremely short now for two reasons: 1. Danisco used to bring 3000mt D-Xylose - the starting material of Xylitol - into China for Xylitol production. Now that Dupont has acquired Danisco, Dupont uses Xylitol and raw oil to produce chemicals in other industries and needs to purchase 5000mt Xylitol annually. 2. This new application increases Xylitol’s demand greatly. D-Xylose production has downsized greatly due to pollution control. The number of factories producing D-Xylose has been reduced by 75% with only about 10 factories left.

Collagen Type II

Chondroitin Sulfate

Keratin

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ingredientsonline.com™ Market Trends | Summer 2017  

ingredientsonline.com™ Market Trends | Summer 2017