MARKET TRENDS WINTER 2018 By Tony Xue
General Manager ingredientsonline.com Shanghai, China
ell, it’s winter, and with the heating and warming system being launched in North China, it is a disturbing time for Chinese factories to face and challenge the pollution control pressure. As updated in last our few reports, the Chinese government is taking measures and actions to bring pollution under control and now the measures are even stricter.
The news about environmental protection is well reported and known. The data is monitored in real time and published on the government’s official website. It is the right thing to do and good for people’s living conditions, but in the business world, the supply and cost are greatly affected. There are two periods of such market conditions: One was in 2008, the year of the Beijing Olympics, and the other is now, the new era under the administration of President Xi. We believe it will have a long and profound influence not only now, but for many years to come.
B12 The factories located in Heibei Province are cutting output to stay within the guidelines for the government’s pollution control requirement. The other factory in Ningxia Province is increasing the price according to the supply situation. Generally, fewer and fewer low price quotations are offered and the price is increasing step by step.
BCAA The major factory in Hubei Province is providing extremely limited supply of Leucine now. Valine and Isoleucine increased a little bit but the availability is still balanced with demand. As a result, BCAA price is high and firm due to the Leucine shortage. The vegan version of BCAA is even shorter because fermented Leucine is very hard to find in the market. The availability from the only factory is extremely short as well.
BETAINE ANHYDROUS/BETAINE HCl The output in Shandong Province is affected by the pollution control but availability is good as there are plenty of factories in China and throughout the world. The price may change a little bit due to the currency exchange rate but generally will keep stable.
BIOTIN Due to the starting material shortage, the price of Biotin is rising. The increase is more obvious in USP grade against 2% and 1% in food and feed grade. This increase gets a lot of attention from feed pre-mixed factories and this trend will continue for two to three months.
CALCIUM D-PANTOTHENATE The quotation from the two major factories are
It is the right thing to do and good for people’s living conditions, but in the business world, the supply and cost are greatly affected.
on and off in the last two months. The price is at a high level compared with last year or earlier this year, but it is fluctuating. One reason is that a new factory has stepped into production and offers a small amount of availability, and the other is the price is way beyond the customer’s expectation which slows down the transaction.
CHOLINE CHLORIDE/BITARTRATE The major factories in China have made some slight price adjustments in the last two months due to the starting material cost increasing and the currency exchange rate. The price increase is more reflected in the feed grade of Choline Chloride, and for food grade products, the price has increased step by step.
CHONDROITIN/COLLAGEN Chondroitin and Collagen products are getting more and more popular, especially Collagen. Collagen from different animal sources is
INGREDIENTSONLINE.COM • WINTER 2018
becoming the new star ingredient for beauty and joint health, and dosage is normally large.
by the pollution control. The production locations used to be located and centralized in Yangtze River Delta, but now factories are moving North West to Ningxia provinces where the starting material is better supplied and the pollution control pressure is less.
The price is running high but at a reasonable level for now.
This product’s raw cost is stable in China and the sales price in the U.S. market is largely depending on the anti-dumping investigation. There might be some changes in coming months, but so far, it has only increased a little bit.
The factories in the old location, Yangtze River Delta, downsized their output greatly. One of them stopped production in September and others in the new location, Ningxia provinces, are facing great challenge as well. It is expected the price will start to increase in November and in the meantime, the supply will get tight.
Production at major factories is on and off due to inspection and pressure from the government. Those located in the old area close to the residents are intensely monitored by the government. The rest are lucky enough to be located in a remote industrial zone and pollution control is guided by administration of the industrial zone.
The price of CoQ10 has bounced back a little bit in the last month compared with the sharp increase from September to early October. The factories are taking all kinds of measures to deal with the pressure of pollution control and are trying to stabilize the market. We think the price will remain stable at the current level in the coming two to three months.
Since our last update, the price has significantly increased and customers have been eager to place an order. As we mentioned in the last report, DHEA comes from two sources, Soy and Wild Yam. The one from Wild Yam increased all the way, and while the one from Soy was stable or trending down before, it is now increasing and better recognized and also better priced. The attention of price increase is more reflected in the U.S. market compared with two months ago.
China used to be the largest exporter and now Thailand and the U.S. are also joining the market. The price is increasing step by step.
CITRIC ACID ANHYDROUS
CREATINE MONO Production from the major factories is effected
With the winter coming, it’s expected the demand will be very strong and prices will increase fast.
GINGER Traditionally used in India and China, U.S. marketers and formulators are using this ingredient more and more, both powder and oil forms. It is widely produced in India and China, and the business volume will be huge for this ingredient in the future. As to the price, it is stable and goes with the fresh Ginger price change.
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material are available in the market now.
With all the costs increasing, Glucosamine price has increased a little bit as well. Glucosamine price has been at a low level for the past two years and the eagerness for better profit from factories is strong.
The benefits of Green Coffee Bean are more and more recognized, not only for weight loss, but also in improving the immune system
Demand and supply are balanced and the price is stable. There is a trend that customers are looking for a better version of tea instead of just Green Tea.
In the U.S. market, the material now is in short supply. There are many good factories around the globe including Japan, Thailand and of course, China. However, due to the antidumping policy, these factories are more focused on their domestic markets. With limited output, the export to the U.S. market is difficult.
GRAPE SEED More factories are beginning to use the starting material coming from Europe and the price is lifting slightly.
GREEN COFFEE BEAN 50% Supply is currently stable but at a higher level against that of earlier this year due to the raw material price increase. Both Indian and Chinese
GREEN TEA EXTRACT
INOSITOL The supply of Inositol is getting tight and the price is increasing step by step. Due to the pollution control pressure, the factories are having very limited output or shutting down for the winter. We think the price will continue to increase as the output is very limited in the coming three months.
L-ARGININE/L-CITRULLINE L-Arginine is in short supply now. The largest factory in China doesnâ€™t have a stable output and Korean and Indonesian factories are also on a great number of back orders.
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Citrulline price so far is stable but while using Arginine as the starting material, it is expected the price will increase step by step including Citrulline Malate as well.
L-CARNITINES Compared with two to three months ago, availability is better. Factories resumed production step by step from shut down and have started to ship out goods. The prices are still at a high level and future trends will depend on how long factories can keep the output stable and how well they can handle the pollution control pressure.
L-LEUCINE/L-TYROSINE/ L-CYSTEINE/L-HISTINE HCl Since the largest factory in China doesnâ€™t have a stable output, the price increased fast in the last two months. There are some other factories available, but the hydralization process causes pollution issues, so the output of all these amino acids are still limited.
L-GLUTAMINE Currently, the demand is stronger than the
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output capacity from China. In 2017, the supply is mainly from the two major factories in China while Korean and Japanese factories have limited output or have stopped production. It is said that Japanese factories are considering outsourcing the Glutamine production to the Chinese factory. If that happens, China will be the only country to produce Glutamine. The sales channels are stable and it’s expected that the price will stay firm and at a high level in 2018.
Creatinol-O-Phosphate, Calcium Beta Hydroxybutyrate Magnesium Beta Hydroxybutyrate Sodium Beta Hydroxybutyrate
There used to be some new enzyme technology to produce this ingredient but the production is on and off. Only the fermentation production process continues smoothly with a consistent supply, but the Shandong province, where the factory is located, is intensely monitored by the government. With the increasing demand domestically and internationally, it is expected the price will be firm and trend upwards in the coming month.
L-LYSINE Shanghai KangXin Chemical Co., Ltd is a joint venture company founded in 2000 and is located in Shanghai China, which covers 2000m2 and is one of the earliest manufacturers in China dedicated to providing high quality products of food additives worldwide.
The situation of Lysine is similar to that of L-Tryptophan but the supply is better. The price has increased a little bit but not as much as L-Tryptophan.
KangXin is a certificated company of “Food Additive Production/Health Permit” issued by the Ministry of Health, as well as ISO9001 Quality Management System and kosher certificate.
Korean and Japanese feed grade factories have very limited output and China factories are busy with fulfillment of back orders. Chinese factories used to get Korean or Japanese feed grade product refined to get the food grade or USP grade product, but now they can only get the domestic material.
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It is expected that the price will continue to increase until the feed grade production supply improves, otherwise, it will be even higher and in shorter supply.
MSM The supply of starting materials and production are normal so far and we see the price is stable in the last two to three months.
NIACIN/NIACINAMIDE With the major factories increasing the quotation offer, the market price is at a higher level compared with Q1 and Q2. With the cost increase to treat the air pollution in fall and winter, and also the limited output of the starting material of Pyridine, the price will stay firm at its current level. However, a new factory in Jiangxi province has started production and we will keep customers posted on how this will affect the future supply of B3.
Epimedium Extract Tribulus Extract
Rhodiola Extract Garlic Extract
Due to pollution control pressure and starting material tight supply, the price offer from major factories are high and firm. A fire occurred at a factory in Hubei Province and led to a shutdown, so it is expected the price could be higher in the coming two months.
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It’s very hard to get the starting material this year and many factories have stopped production. The price has increased significantly and is still quickly moving to a higher level.
RIBOFLAVIN Riboflavin was stable before this October, but after that, the price started to increase. Generally, the increase is still a result of pollution control and factory shut-down. Now, all the factories in China are providing a very limited output into the market and prices have reached the second highest in history in the last 10 years.
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SODIUM HYALURONATE Currently the supply and price are stable. There used to be many factories producing this ingredient but now only the ones who can offer production consistently and of a high quality have survived. The factories are all paying close attention to staying within the guidelines.
SUCRALOSE We often hear from different channels that the price of Sucralose will increase significantly, and we also believe this will take affect soon, but as of now, the price is stable. Under such pollution control and cost increase pressure, we think the price could remain stable because factories are at the stage of fighting to gain more market share. How long they can keep doing this is questionable because there are many voices advising to increase price to cover cost, so it is a good time to lock in a blanket order contract.
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Choline Dihydrogen Citrate
DMAE Bitartrate (L&DL)
A great shortage occurred in the middle of the year but now the supply is getting better compared with two to three months ago.
Choline Bitartrate (L&DL)
Taurine price was at a low level for the past two years and factories experienced a deficit period. There will be some fluctuation, but generally, Taurine price will stay at a high level in the coming three months.
STEVIA The price is currently stable due to collective reasons. The harvest is normal this year and it will not lead to a sharp increase due to the raw material leaves. The demand increases and output increases, but the competition is still going on.
THEOBROMINE/CAFFEINE SYNTHETIC Theobromine and Caffeine factories are causing pollution problems and the supply is getting tight. Factories were expecting the supply to go back to normal in Q4, but based on current pollution control pressure, price will stay firm or increase even more. Since November, natural Caffeine has become available from India at ingredientsonline.com. Although it is higher in price against the synthetic version, it provides another option for customers to get Caffeine and improves availability.
THIAMINE Supply is tight throughout the year and will stay very firm in the U.S. market. Thereâ€™s a new factory which causes the price to lower a little bit, but generally, the price of Thiamine is at an historical level and it will last for another quarter as minimum.
TURMERIC/CURCUMIN Supply is currently stable and available from both India and China. Turmeric is traditionally from India but Chinese material is also very competitive. We were being asked why this happens and after visiting factories and research, we started to realize that the competitiveness of Chinese material comes from the tax rebate. It is an encouragement incentive given by the Chinese government for export business. It is the time of harvest season for Turmeric and it is a normal year, so generally, the price will stay stable.
VITAMIN A/VITAMIN E BASF declares force majeure for Vitamin A and E and several carotenoids on Nov. 10 due to a fire which occurred during the startup of the Citral plant in Ludwigshafen. The cleaning process, follow-up inspection, repair and restart of the Citral plant will take several weeks.
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The distributors and manufacturers are very busy trying to find availability, and the price will quickly be increasing in the coming two to three months.
VITAMIN C Factories in Shandong and Hebei province are shut down due to the pollution control pressure. The export of Vitamin C into the U.S. continues to increase in recent months and the willingness for blanket orders from all types of customers is very strong. We are expecting some new production capacity in the market by the end of Q1 to early Q2 and will keep customers posted on how this will affect the market in our next issue of the ingredientsonline.com Magazine. Vitamin C derivatives like Sodium Ascorbate and Calcium Ascorbate, as well as their DC grades, are very limited in supply. Some small factories who are doing the derivatives still have some output, but the supply from the major factories are very short.
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XYLITOL/XYLITOL DC Supply has not gotten better as expected and is still very tight due to starting material and pollution control pressure. Generally, the price is increasing, but not as much as the price of some vitamins because we find the starting material D-Xylose is getting a little better compared with Q3.
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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.
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