Update! How has the market developed in 2018?
At the end of 2017 we reported on the production bottlenecks and price increases resulting from a number of production shutdowns in China. The factory closures initiated by the environmental authorities resulted in rapid price rises across the full spectrum of vitamins.
Chinese manufacturers are currently adjusting to the new situation and investing in their plants in order to comply with the authorities’ constraints. Nevertheless, there may still be high prices and bottlenecks during the winter months. In particular during the colder periods, the air pollution – caused by coal fired power plants - increases, so guidelines could become even more strict.
Ascorbic acid (vitamin C) and derivatives
Following the price explosion of 2017, we witnessed a consistent fall in prices. The main reason for the price drop was the normalization of production volumes by established manufacturers. In addition to this new ascorbic acid producers stepped into the market
Derivatives like sodium or calcium ascorbate were unaffected by the sharp fall in price, since the new manufacturers focused their production solely on ascorbic acid.
Ascorbic acid prices are now slowly rising again, and many of the new manufacturers have had to shut down their production due to the renewed and even stricter environmental policies of 2018. At this point, we can only give a limited prognosis for 2018. If the manufacturers start producing regularly again during the second half of the year, there will be overcapacity for ascorbic acid and hence another drop in prices. Looking ahead to the colder months, however, when Chinese authorities impose even stricter environmental policies, there may be further factory closures towards the end of the year. This would mean shortages in production volumes once again and a corresponding rise in price.
The global vitamin market has been characterized by extremely strong price fluctuation over the last 12 months. For some products prices have been known to rise five-fold in a matter of a few weeks, but as quickly as prices shot up, they dropped again back to initial levels.
For vitamin B1, vitamin B5 and vitamin B6 a slight fall in prices was observed over the last half-year thanks to an improved situation in production. Despite this, the price level remains very high. By the end of 2018 we expect to see stable to slightly rising prices and therefore recommend buying ahead in the medium term.
The price for vitamin B3 doubled in 2017 as a result of a global shortage of the main raw materials. The situation eased significantly during the course of 2018, and as a result prices fell back to the original level. During the second half of the year, we expect to see stable to slightly rising prices.
The year 2017 turned out to be a record year for vitamin B12. Here, prices increased five-fold in some cases, but fell back to their original level again in the first half of 2018. The situation has not yet eased and new factory closures in China mean the price is currently rising again rapidly.
The Amino acid market has also been characterized by volatile prices over the last few months, but not to the extent of the vitamin sector. We are assuming the price and supply situation will remain stable.
The stricter environmental policies imposed by the Chinese authorities boost price increase for L-Glycine. The price development has been reinforced by the continually rising price of acetic acid, one of the main raw materials for production of L-Glycine. By the end of 2018 we should be able to breathe easy. Lower raw materials prices and increased production output are pushing prices down, although we can expect to see production bottlenecks and subsequent price increases.
The price of L-Carnitine has almost doubled since the start of 2018. Due to the environmental constraints, one important manufacturer in China has been unable to produce for the entire year, while other manufacturers have been ordered to reduce their production by the authorities. Volumes are therefore limited, and prices will either remain high or rise even further.
For other amino acids such as BCAA, L-Leucine, L-Isoleucine, Valine and L-Glutamine, both production volumes and price levels remain stable. No significant changes are expected here before the end of 2018.
For L-Lysine, we recommend buying ahead in the short term. Prices remain consistently low with no signs of medium-term change.
Following factory closures, the world’s biggest producer has now returned to regular operations in China which resulted in falling prices since the beginning of 2018. While prices are currently stable, there might be another bottleneck in the winter time We recommend buying ahead in the medium term.
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