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Market Update: Summer 2018
7/10/2018 7:29 AM
Looking towards summer 2018, the trade war* launched by President Trump against China ranks as the top potential factor which will influence the future supply of ingredients. Once product list and timeline are confirmed, and the new tariffs* are charged upon the imported products from China, the prices will change dramatically in the ingredient industry because most of the key dietary supplements come from China such as Ascorbic Acid/Vitamin C, Taurine, COQ10, etc. The uncertainty is how many products will be listed and when the new tariff rates will take effect, for which, we will monitor closely.
Another important factor is the currency exchange rate between China and the U.S. RMB value has been increasing against the USD in the first half of the year and it looks like the trend will continue. The China exporters are trying to offer shorter payment terms so that they can collect the USD sooner to reduce the loss due to the currency.
As to the supply from factories, the general situation is better now. Most of the products are back to normal. Some new factories launched the products that were tight at the end of last year to early this year, and some existing factories whose production were shut down due to different reasons are resuming their production.
*As this issue goes to press, the trade war/tariffs are uncertain.
Price is increasing step by step for three reasons:
1. The factory is trying to make more profit from Ace K to compensate for the loss of their other ingredients
2. One of the major factories shut down
3. The currency exchange rate change
The pollution control still has great impact on the major factories and price remains very high. Some new factories are trying to produce B12 and we think it will become stable in the coming two months.
Instant BCAA supply and demand are balanced so far and the price is stable. The individual Leucine, Isoleucine and value supply are tight. The major reason for this is the factory of the individual amino acids supply most of their output to the Instant BCAA factories already and they are not worrying about the sales and only offer availability to the market when the deal is good.
BETAINE ANHYDROUS/BETAINE HCL
Generally, the price of Betaine becomes higher due to the starting material cost increase.
The number of inquiries are much greater than earlier in the year and we think the price will stay firm.
The price has dropped due to an improved availability from the major factories.
The competition between different factories is more intense and different factories have adjusted their prices based on their capabilities.
Prices are stable and at a high level. One of the major factories had some issues with the FDA which caused supply issues, but there are other factories who are running production normally.
The cost of pollution treatment and also the difficulty of the production will keep the price stable at the current level.
CALCIUM/MAGNESIUM/MANGANESE/ POTASSIUM GLUCONATE SODIUM/ZINC
The antidumping investigation is still on for Gluconate Salt which influences the importation from China.
CALCIUM/MAGNESIUM/SODIUM BHB (BETA HYDROXYBUTYRATE)
The inquiries keep increasing for the above three supplements and supply is very tight due to factory production schedule and starting material supply.
CALCIUM CITRATE/MAGNESIUM CITRATE
The import is switching from China to India due to the antidumping issue with Chinese material.
Some existing factories resumed production which has made the supply better for B5. However, the pollution control in Shandong province is strict and it causes some issues with the production.
Generally, the price is not as high as earlier this year and is stable at its current level.
The Chondroitin market is currently stable. Collagen is becoming more popular and customers are trying to use different types and different sources to reach the best delivery value and results.
CITRIC ACID ANHYDROUS
Price is stable and will be for one month but higher than earlier this year due to currency, production cost and duty fees.
CLA OIL/CLA POWDER
CLA price is generally stable but increased little by little due to production cost and the currency exchange rate.
Most blank orders are signed for the major demand in the U.S. and the price became soft due to good availability.
Prices are higher than at the beginning of the year due to limited starting material. Some factories chose to relocate in order to avoid the pollution issue while some factories tried to step into production. We think the price will be high towards the end of the year, but when the new factories start to produce stably, it may stabilize the price and market as well.
Production and demand are balanced, but current demand is far less than the production capacity, so the price is expected to be soft in the coming three months.
Price remains firm so far and demand is strong. The factories know the overall demand well and the market has developed in a healthy manner.
Price will increase a little bit due to the currency, but generally it is still stable.
The N-acetyl D-glucosamine demand increased a little due to the better solubility and improved cost.
Price is currently stable and availability is good from different countries.
Supply and demand are balanced and price is currently stable.
The oversupply issue is still not fixed and the demand of Arginine and Citrulline are increasing, but it is still less than the supply from factories. Current price is at the bottom and has little room to drop further.
Production is still on and off due to pollution control and the starting material supply leads to an unstable supply. Price fluctuates a little bit up and down but is generally stable.
These hydrolyzed amino acid prices are stable now. Last time, we mentioned fermented Tyrosine is available and now we see some factories are using the fermented Tyrosine as a starting material to produce other ingredients due to better cost which reduces the usage of hydrolyzed Tyrosine.
Price has been stable and demand is very strong so far this year. The major factories may shut down for summer maintenance and price will stay firm or increase.
Price increased fast and availability is limited. The recognition of this ingredient increased the usage both domestically and internationally.
Supply and price are stable.
The shortage is not as much as Q1 and availability is better because more factories are starting to produce it in China. Some of the feed grade producers are also making food grade as well.
Price is higher than earlier this year due to the starting material cost increase.
With the new factories coming in, and also with the expansion of production, price is decreasing. The factories sense this trend and are taking measures to control the output to stabilize the market.
Similar to Vitamin B1 Thiamine, price is stable at a high level, but the demand is a little soft. Some factories are still planning to produce more, so it is expected the price will drop a little in the coming two months.
Supply is still very short due to the shortage of the starting material, and price keeps increasing.
As we mentioned in the last update, some new factories have successfully launched the production and the supply situation is much better now. The price is also coming down to a more reasonable level.
Supply is becoming tighter since April and the cost is increasing due to pollution control and labor costs. Price will stay firm for the next two to three months.
The quality has been greatly improved from China over the years and the price increased slightly due to labor costs and currency.
Although availability is better compared with last year, the demand increased faster for the health benefit and recognition, so the price is staying firm or increasing. The number of inquiries and sales amount are both increasing as well.
There is an issue of overcapacity and the major factories are still trying to gain the market share, so the price competition is intense. However, the profit is very low at the current stage, so it will be hard decrease more.
Price is lower than at the end of last year and supply is better due to better output from different factories.
Price is still stable but the demand is a little less than earlier this year. The export to the U.S. is not as much as before.
VITAMIN A/VITAMIN E
The BASF Lemon Aldehyde factory resumed production since May and it is expected the supply will become available in June. Prices are dropping back to a more reasonable level and some customers are preparing extra stock in case of supply issues, so the demand is becoming less at current stage.
With all the major factories production back to normal, prices decreased slightly. However, the exportation to the U.S. remains active. Some factories will shut down for maintenance during summer and some factories will be relocated for upgrading, but the supply will remain sufficient.
The tight supply still continues due to a storage of starting material. It may last long and until the end of the year.
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