MARKET TRENDS SPRING 2018 By Tony Xue
General Manager ingredientsonline.com Shanghai, China
is the time of the Chinese New Year, and after that, the Chinese people will be back at work from family reunification and expect a new and prosperous 2018. The pollution control pressure will be continuous, but the impact of the warming system is being reduced with the coming of spring. Before the Chinese New Year holiday, there was a sharp change in currency exchange rates. It was 6.35 RMB=1 USD and now it is below 6.2 RMB = 1 USD. Therefore, many Chinese suppliers put quoting on hold until the end of February. Another challenge is the suspension of transport across China during the holiday, and it is expected to be fully back to normal in early March.
Lastly, due to all types of challenges in China, there will be fewer factories for particular products who are large enough to handle the cost increase in pollution control, labor and power, who can manage all the supply from starting materials to the finished products and who can adopt the most advanced technology to get the best output rate, etc. Also, oligopolistic competition will manifest more and more.
Disclaimer - Due to the Chinese New Year and busy schedules, this article was written in mid-February. For more current or specific information, you can always contact firstname.lastname@example.org for assistance.
Same as our last update, the factories located in Heibei province are cutting the output to stay within the guidelines for government 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.
Currently, the price is stable and at a high level. Factories are stopping quotation and shipping due to Chinese New Year, but generally, it will stay at the current level. The demand and supply are balanced.
BCAA Leucine price is stable and at a high level now. We are seeing that the price of isoleucine and valine will increase in Q1, so the BCAA price will stay firm. The fermentation grade leucine is still hard to get, and it will continue in Q1.
BETAINE ANHYDROUS/BETAINE HCL The output in Shandong province is affected by 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.
INGREDIENTSONLINE.COM â€˘ SPRING 2018
ingredient for beauty and joint health, and dosage is normally large. 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, and also, the safety and assay test are the key points to get the right material.
Same with our last update, the quotation from the two major factories have been on and off in the last two months and the price is fluctuating. Compared with Q3 and Q4 of 2017, the price has come down a little and is expected to be stable in Q1. Again, it is still much higher than customer expectation and there is still room to fall.
CITRIC ACID ANHYDROUS
Generally, the price of Citric Acid is expected to be stable at the current level in Q1
The major factories in China have made some slight price adjustments again last month due to the starting material cost increase and currency exchange rate. The demand and supply are balanced and the increase will be mild.
CHONDROITIN/COLLAGEN Chondroitin and Collagen products get more and more popular, especially Collagen. Collagen from different animal sources is becoming the new star
Price increased a little after the antidumping investigation which has come to an end now. It seems both customers and factories will accept this result, and after a busy season from last December to January, most blanket orders have been filled.
CoQ10 Currently, the price is stable and most blanket orders have been filled. In the spot purchase market, two to three factories will be competing with each other and it will determine the trend in 2018.
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The output in the last two to three months is very limited due to the starting material shortage. Even for those who are located in remote areas where the starting material is more accessible, the production is still on and off. As a result, the supply in Q1 will be very tight and short and we expect the price to increase.
FOLIC ACID Price is stepping down to a more reasonable level now and production is also stable with two to three new factories.
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GABA After our last update, the price has increased and remains stable at its current level. Some new factories stepped into production due to this increase. There might be some fluctuation, but we think it is unlikely to drop in Q1 due to limited supply, even with new factories coming because the overall supply is still a little short.
GINGER Demand keeps increasing, but the price is still stable as Ginger’s starting material is well supplied.
GLUCOSAMINE The price is stable now and factories are holding new quotation.
GLYCINE Availability may be a little better in Q1 from Thailand and Japan, and the price will be stable or drop a little bit from end of Q1 to Q2 if all productions go well.
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DMAE Bitartrate (L&DL)
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GRAPE SEED Quality on the market is better than before with combined efforts from the FDA and factories themselves. The demand is stable in the U.S. market and there is a slight price increase, but generally accepted by most customers.
GREEN COFFEE BEAN 50% The price has increased a little bit and the demand remains stable.
INOSITOL Inositol is increasing to a point where the supply and demand are balanced. At current market level, the factories can make profit, and in the meantime, the price is acceptable to customers. There are still challenges for the factories to handle in terms of pollution, but the output is better. There is also better control by the factories and we think this is good for the industry.
L-ARGININE/ L-CITRULLINE Chinese Factories used to depend on a domestic supply of Arginine, but now more and more importation is taking place. Therefore, in China, Arginine is supplied both domestically and overseas, which, as the starting material, may lead to an oversupply issue of Citrulline and its derivatives.
L-CARNITINE Same with our last update, the availability is a little better than that from the middle of 2017, but the prices are still at high level. Future trends will depend on how long the factories can keep the output stable and how well they can handle the pollution control pressure.
L-GLUTAMINE So far, we haven’t seen too much action from Korean and Japanese factories, and if that continues, the demand for Chinese Material will be strong. The price is increasing step by step from last September to now and it may go a little higher. However, it cannot go too high, otherwise, the factories in Korea
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and Japan might resume production for this profit.
L-GLUTATHIONE REDUCED The price is staying firm and the major factories have gained market share well over their effort in the last five years. Factories also develop regular density and high density materials to meet different customers’ need.
L-LEUCINE/L-TYROSINE/ L-CYSTEINE/ L-HISTINE HCL Due to the high price of Leucine and L-cysteine now, Tyrosine is a little soft because there is no need for factories to keep a high price for a better profit. It is also being said that fermentation Tyrosine is now available to produce some derivatives like N-acetyl L-tyrosine, which will make the hydrolyzed Tyrosine price stable or soft.
shutting down, there is another Chinese factory out of production. This shortage will continue in Q1.
MSM The supply of starting material is still stable.
NIACIN/NIACINAMIDE Supply is a little better compared with the shortage from last November and December in the U.S. market, but in China from January to February, the prydine production is limited and getting tight. As the starting material, it may lead to a shortage in Q1.
With L-histidine HCL, there are still very few people who carry this product and the price is stable at the current level.
Pyridoxine is still at high level at the time of this writing and will keep stable. Although current price is way higher than customer expectation, the pollution control has great influence on the production and will be hard to change in a short time.
Supply and price are stable.
The poor harvest from last year led to a starting material shortage and it will keep tight for the first half of 2018 while the price may increase.
Besides the Korean and Japanese factories
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RIBOFLAVIN Price remains at a high level and major factories’ production is on and off. Due to the shipment schedule delay from the Chinese New Year, the European and U.S. market price is even higher than that of the China domestic market. Some new Chinese factories may be starting in Q2 and we will need to monitor the new capacity to see the trend.
SODIUM HYALURONATE The price is slightly increasing due to all of the cost increases. Factories are not only paying attention to guidelines from the government, but also are studying the market volume well and staying rational. Their goal is to get the market stable and to grow healthy instead of running into the price competition with lessons they learned before.
STEVIA Price is currently stable and the harvest in 2017 was good. Factories are competing with each other to gain more market share. It is not easy to change the factory origin due to the taste issue, so the earlier the factories can get
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customers’ approval, the better market share they will gain.
SUCRALOSE Although the cost is increasing for Sucralose, factories are still trying to fight for market share. The factories in Shandong, Anhui and Jiangxi will dominate the market and how the price goes in 2018 will be determined by these factories. Currently the price is stable at the point of no profit.
TAURINE Price is currently stable and not as high as Q3 2017, but the price is still at a high level. The factories do not want the price to be too high because they are afraid if that happens, new factories will step in, so sometimes special offers are taken for a special request.
THEOBROMINE/CAFFEINE SYNTHETIC Theobromine and Caffeine are currently stable. Due to the earlier shortage, the price is a little higher. Again, the factories are making a good balance of the output and demand, and it will continue in Q1.
Price is still at high level due to all sorts of cost increase. The major factories’ production is on and off due to the holiday and pollution control. Most of the blanket orders are booked for Q1 and in the spot purchase market. The price is stable and at high level.
TURMERIC/CURCUMIN The price of Turmeric and Curcumin is stable. Factories are either providing regular straight powder or are focused on a high bioactive version to meet customers’ demand. Generally, from last December to now, the harvest is good and we think the trend is stable in Q1.
VITAMIN A/VITAMIN E The BASF lemon aldehyde factory will restart in March 2018. After that, Vitamin A and E will be gradually supplied in six to 12 weeks. Vitamin A is expected to reduce production by 700-1000 tons and the recovery time will be in April 2018. Currently, the supply is still limited and the orders for Q2 have not yet be taken. NHU advised that the total output in Q1 has been fully booked and has stopped quotation. The price will remain stable and at a high level in Q1, and may get better in Q2.
VITAMIN C Factories in Shandong are back to normal, but as of now, factories in Hebei province are still shut down. The new production capacity is well on its way to stepping into the market. The feed grade product is ready in the U.S. while food and pharmaceutical grade products may take a little longer. The price may come down a little in March, but it will be hard to get back to the level of early 2017 and should remain at a high level. The Vitamin C derivatives like sodium ascorbate, calcium ascorbate and also their DC grades may get a little better, but the major factories are controlling the output and it takes time for small factories to be recognized, so the price will remain stable.
XYLITOL/XYLITOL DC Supply has not improved as was expected, and it is still very tight due to the starting material and pollution control pressure. Generally, the price is increasing, but not as crazy as the price of some vitamins because we find the starting material D-xylose is getting a little better compared with Q3 of 2017.
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