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MARKET TRENDS

MARKET TRENDS By Tony Xue | General Manager, ingredientsonline.com Shanghai, China

5 HTP

CHOLINE BITARTRATE

GABA

The harvest in Africa has been stable for the past two years and it’s expected to stay the same for this year with no big changes in price and supply.

There are three starting materials for Choline Bitartrate: Trimethylamine, Ethylene Oxide and Tartric Acid. Tartic Acid prices are on the rise by RMB 1000/mt, while the Ethylene Oxide price is on a decrease by RMB 800/mt and Trimethylalamine is stable. In order to keep the price stable and firm, the factories are limiting the output.

This product’s output is highly affected by the weather. Due to the hot summer looming, the haze is much less, so the pressure to deal with environment control is less. The major factories’ production are back to normal and they are trying to fulfill orders that were left behind from earlier. The supply is tight but the price should be stable now.

CITRIC ACID

GAMMA ORYZANOL

The U.S. Department of Commerce is initiating antidumping and countervailing duty investigations of imports of Citric Acid and certain citrate salts from Thailand, Belgium and Colombia. In order to prevent possible tracing and duty claims, Indian manufacturers are controlling the output. This leads to a tight supply of Citric Acid and its salts, and a slight price increase.

Due to raw material and labor cost increases, Gamma Oryzanol prices have increased a little bit. Market demand is on the rise and has good future prospects due to increased awareness of its health benefits.

ACESULFAME K FCC Acesulfame K price increased slightly due to the sharp increase of sucralose in 2016 but now it's very stable. If there is no big change on the factory side, it is predicted the supply will be very stable for the rest of the year.

ASCORBIC ACID SERIES Ascorbic Acid prices kept increasing in the first half of 2017 and now tend to be stable but firm. The traditional major manufacturers are still claiming the shortage is affected by shut-downs in the summer for maintenance. However, as of our last update, we have witnessed new factories such as Tuoyang, Lvyuan and Tiger provide good availability to the market. We predict that the supply will become balanced in the next one to two quarters.

BETAINE There are three starting materials for Betaine: Trimethylamine, Chloroacetic Acid and Sodium Carbonate. Trimehtylalmine is stable and Chloroacetic acid is on a rise by RMB 1000/mt which leads to a slight increase for the Betaine price.

CARNITINES The major factories of Carnitine including NEPGF, Hengtai and Koncep, are all shut down due to environment control. The other factory, Chengda in the Zhejiang Province, resumes production in July, but as was with D3, the governmental environment protection team is inspecting this area which may further affect the production. All the factories have many back orders and new shipment delivery could only be in September.

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INGREDIENTSONLINE.COM • FALL 2017

CURCUMIN 95% EXTRACT The supply is stable now, although some reports advise that the harvest in India this year is not as good as last and most factories already have enough starting material from different channels.

D-CALCIUM PANTOTHENATE Vb5 is experiencing a sharp increase as of now. On one side, factories are shutting down production for maintenance, and on the other, the two major factories have stopped quoting and are not likely to resume in the short term.

DHEA Currently, DHEA is made from two sources: 4-Androstenediol from Soy and Wild Yam. The one from Soy is on a down trend because of the sufficient soy supply. Some factories are trying to add fermentation into this process flow to make the cost better. The one from Wild Yam is on a rise because of environment control.

GLUCOSAMINE 1. Current market: Due to environment control, small to medium sized factories are being shut down one by one. The production cost has decreased a little bit while the major factories enlarge the output a little bit. 2. Price Status: Its starting material’s (shrimp and crab shell) supply has been stable for the past two years and harvest is good. Only a few major factories have stayed in the market with good investment and are set up for environment control. The market and supply are expected to be stable for the rest of the year.

GLYCINE USP The price of Glycine is on a slight rise currently. One of the major factories in China is forced to hold production due to environment control. The buyers in China are trying to get more supply from countries close by, such as Cambodia.

GRAPE SEED EXTRACT Overall, the price is stable, but there are some changes that factories are focusing on while supplying the high quality extract with high


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quality grape seed. This change comes from more and more customers paying attention to the ID and assay testing to make sure the material is coming from good sources.

HORNY GOAT WEED Due to the starting material plant experiencing a shortage, Horny Goat Weed has been in tight supply since early in the year. Now, the new harvest has just been completed and the price may come down step by step.

INOSITOL Currently, Inositol price is still at an historical level and the market demand is a little more than that of last year. Meantime, the supply is still stable.

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

INULIN Price trends are stable, and manufacturers have good capacity to meet demand. Recent sales have increased.

L-ARGININE HCL & L-ARGININE BASE The price of Arginine was soft at the end of June but now is bouncing back. The hydrolyzed Arginine has issues of yellow spots this year, while the factory of fermented Arginine is trying to restructure the sales channel by direct selling to overseas end users while limiting the supply to the traders. We think the fermentation grade will play a more important role in the future market due to the strength of giant producers. In the summer time, the output rate is greatly affected by the temperature in the fermentation process and the factory advises us that the price may increase in the following two months.

L-CITRULLINE, L-CITRULLINE DL-MALATE 1:1 & L-CITRULLINE DL-MALATE 2:1

Betaine Anhydrous Betaine Citrate

Choline Dihydrogen Citrate

Betaine HCL

Creatine Pyruvate

Betaine Monohydrate

DMAE Bitartrate (L&DL)

Calcium Pyruvate

Potassium Pyruvate

Choline Bitartrate (L&DL)

Pyruvic Acid Sodium Pyruvate

Choline Chloride

After the CPHI trade show in June, the price has been at a high level and has also become a little soft in July. The reasons are: 1. Arginine price is better in June and the factories are getting a good supply to produce Citrulline. 2. More factories are trying to produce Citrulline and enlarge the production capacity. But now Arginine prices are bouncing back a little bit and the price of Citrulline and its salts will stay stable or increase slightly in the following two to three months.

L-CYSTEINE, L-CYSTEINE BASE & L-CYSTEINE HCI MONO / ANHYDROUS & N-ACETYL-L-CYSTEINE So far, L-Cysteine prices have been increasing for about eight months and are still in tight supply. The Hydrolyzed Cysteine supply is not stable at all while the fermentation grade output is still very limited. The summer’s hot weather will make the production even worse and the price is expected to rise.

L-LEUCINE REGULAR & L-ISOLEUCINE USP The price is stable for L-Leucine and Isoleucine as well as BCAA. The price of BCAA has been at a high level for some time, so even if the individual amino acid might be increasing, the price of BCAA itself is expected to be stable. Supply is tight during summer time and factories are fulfilling back orders step by step.

L-LYSINE MONO HCI GRANULAR The price of Lysine is on a down trend now due to industry change. In 2017, China’s government is implementing new regulations to better control the feed industry’s influence on the environment. Small to medium sized farms are being shut down while the production is centralized to large scale facilities with better control. This move leads to less consumption of corn and feed additives and Lysine being oversupplied now. Imported corn is further affecting the domestic price, and it makes the Glucose price experience a down trend as well. If the press of environment control is on-going as of now, and it is close to the

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Please email sales@pengbobio.com directly for products not listed at jiuan.ingredientsonline.com INGREDIENTSONLINE.COM • FALL 2017

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MARKET TRENDS

harvest season of corn, the price is unlikely to increase and will stay stable or soft for the rest of the year.

L-TYROSINE & N-ACETYL-LTYROSINE As was with Cystein, Tyrosine supply is very short and tight, including its derivatives N-acetyl L-Tyrosine. Their prices are expected to be higher in the next two months.

L-VALINE Valine price has been on the rise for the past two months. Although Meihua and Fufeng produced some inventory in June and July, it seems the demand is still very strong. The summer time output will be limited due to the hot weather, and we think the price will keep firm and increase a little bit in the next two months.

MELATONIN Due to environment control, output in 2017 is very limited, so the demand is staying strong. Currently, the situation is a little better but supply is still tight.

MSM

well. There are only two major factories left, while other factories have walked away from production due to unpredictable starting material changes. The starting material DMSO factory needs to fix some technical issues, so currently the production is on and off periodically.

NIACIN (B3) & NIACINAMIDE (B3) USP Current supply is stable, although factories are facing challenges from environment control. At CPHI in June, we learned that most factories such as Lonza, Brother and Vanetta all increased quotes due to peak season coming from July to Oct.

PEA PROTEIN Due to the Jiaodong Peninsula drought in June, the whole area of Yantai (a city in Shandong province) is lacking water. The drought also has led to a shortage of manufacturing water from underground which greatly impacts production. Due to this inadequate output, the price of Pea Protein has started going up. The factory is still trying to resolve the issue and is expected to see improvement in September. If production can resume, the price should return to normal.

Due to its starting material, DMSO, experiencing a price increase, MSM price is on the rise as

L-Carnitine Base L-Carnitine Tartrate L-Carnitine Fumarate Acetyl-L-Carnitine HCL L-Carnitine HCL L-Carnitine Orotate Propionyl-L-Carnitine HCL L-Carnitine 50% Feed Grade

Levocarnitine Pharma Grade (US FDA approved) L-Carnitine HCL (JP-PMDA approved) Dl-Carnitine HCL Dl-Carnitine Orotate Raspberry Ketone Anhydrous Sarcosine

CERTIFICATIONS: ISO9001, FSSC22000, FAMI-QS, KOSHER, HAHAL, ISO14001, OHSAS18000

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PHENIBUT HCL Phenibut HCL is currently stable. The starting material is in stable supply and the factory is dealing well with the environment control pressure.

RIBOFLAVIN & RIBOFLAVIN 5 SODIUM PHOSPHATE B2 and its derivatives are stable in price and supply at this time.

SORBITOL POWDER This is one of the regular food additives which China exports large quantities to the U.S. Currently, the supply and demand are stable.

STEVIA 1. Current market: This natural sweetener is mainly used in drinks, snacks and dietary supplements. The export quantity is on a rise consistently with 3100mt in 2014, 3700mt in 2015 and 4400mt in 2016. The export quantity in the first half of 2017 has increased by 10% against the first half of 2016. 2. Price status: Generally stable since February of 2017 while refined sugar products are on a decrease possibly due to the fierce competition.


MARKET TRENDS

3. Starting material and pressure of environment control: We are currently in the period of waiting for the new harvest. While the starting material stock is used up, the price may increase. The cost for water treatment has increased greatly due to its large usage of pure water during the production process, but the major factories have taken measures and actions to make sure production runs well.

THEOBROMINE/CAFFEINE

4. Future trend: The export quantity will keep increasing and usage will become popular.

TURMERIC & CURCUMIN EXTRACT ROOT

SUCRALOSE The price of Sucralose had been dropping since March and now appears to be stable at the level before it increased back in 2016. The major factories will put the price and output under control and we think the price will keep stable at Q3.

The latest news in July from Indian factories is they are experiencing heavy rain in the planting area of Turmeric. We also received the same feedback from Chinese factories almost at the same time. As of now, we see supply is a little tight and factories are busy with fulfilling orders. It is expected that the supply will stay tight and prices will stay firm or go even higher for the remainder of the year.

TAURINE

VITAMIN B1 & VITAMIN B6

Taurine’s price has been on the rise since earlier in the year. Due to the continuous investment of treating pollution and the starting material cost increase — including liquid nitrogen, liquid alkaline and coal — the price will remain at a high level in 2017. The major factories — including Jiangsu Yuanyang, Jiangyin Huachang, Fuchi and Qianjiang Yongan — are all trying to fulfill on-hand P.O.s from the past and are very behind.

Due to environment control, output is far behind. Domestic production is greatly impacted and supply is very tight. The price is on a rise in Q3 and will stay firm.

tight supply, got some inventory and are holding it, which leads to the price jump. Production is mainly done in the Zhejiang Province in China, including NHU, ZMC, Zhejiang Garden and others. The governmental environment protection team is now inspecting this area which leads to further shutdown. The other major factory, Kingdoway, also has stopped production. This situation will last at least three months.

There are signs that prices may be on the rise. The price was stable in the last three months, but some factories are controlling the output and now supply is becoming a little tight. Factories advise that production will be back to normal and output will meet demand but the market needs to be watched closely.

VITAMIN K1 OIL K1 Oil is in tight supply. The major two factories, Anhui Wanhe Pharmceutical Co., Ltd and Shandong Guangtongbao Pharmcetuticals Co., Ltd, are controlling the export quantity/quota which leads to shortage. Vitamin K1 1% Powder price is also affected, but a little better than the oil form.

XYLITOL Currently, the major factories are trying to resolve the shortage issue. Some factories are using tree wood fiber to produce D-Xylose, while it is usually produced from corn cob, and some are trying to expand production. The tight supply will still continue in Q3 but may get better in Q4.

VITAMIN D3

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.

Most factories of Vitamin D3 have stopped quoting since early June. Some traders sensed the

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ingredientsonline.com™ Market Trends | Fall 2017