Henan Julong succeeded
in developing new production technique of 4-HIL. Meanwhile, the company
intended to expand its L-tryptophan business, which also put itself under the
risk from downturn in tryptophan market price.
On
7 March, 2016, Henan Julong Bioengineering Co., Ltd. (Henan Julong) made an
announcement about its success in developing new production technique of
4-hydroxy-L-isoleucine (4-HIL). This new technical produces 4-HIL by biological
fermentation. To be specific, entner-doudoroff and pentose phosphate oxidize
and inactivate the enzymes in the branched chain, which largely improves the
conversion rate of L-isoleucine and makes it possible to mass produce high
purity 4-HIL. Notably, Henan Julong is the first enterprise to produce 4-HIL by
biological fermentation globally. 4-HIL, a new insulinotropic agent, can be
used for the treatment of diabetes mellitus Type II and the regulation of blood
lipids.
Henan Julong is China's leading amino acid manufacturer. Its products include
L-tryptophan, L-threonine and food-grade L-leucine. Particularly, it is the
largest tryptophan producer in China with the capacity of 7,000 t/a in 2015,
accounted for 17% of the global sales.
Moreover, Henan Hongda Bio-Pharmaceutical Co., Ltd., the company's wholly-owned
subsidiary, obtained the Drug Production Certificate on 1 March, 2016, laying
the foundation for its extension to the biological medicine business. Besides,
on 8 Nov., 2015, Henan Julong set up another wholly-owned subsidiary, Henan
Julong Biotechnology Co., Ltd., for its expansion in L-tryptophan business.
The increasing demand pushed Henan Julong to expand its L-tryptophan business.
According to CCM's research, in 2015, China's output of tryptophan reached
12,000 tonnes, up by 9% YoY. Particularly, domestic consumption rose by 9%,
while the export increased by 13%. However, the company will also face the risk
from downturn in market price of tryptophan. According to CCM's price
monitoring, China's overall market price of tryptophan has continued sliding
since 2015. In Feb. 2016, the market price of 98% tryptophan fell to
USD8,086.79/t (RMB53,000/t), sharply down by 53.37% YoY.
Monthly market price of 98% tryptophan in
China, Jan. 2014-March 2016
Source: CCM
The
low market price of tryptophan was caused by:
1. Fall in purchase price of raw material
Due to the huge stock of corn in China, the purchase price of corn kept
decreasing. For instance, Henan Julong uses corn as the basic raw material to produce
tryptophan. According to data from Henan Julong, its purchase price of corn was
USD261.52/t (RMB1,710/t) on 14 March, down by 9.94%, compared with USD287.53/t
(RMB1,880/t) in the first business day in 2016.
2. Competition from soybean meal
The market price of soybean meal, a substitute for tryptophan, continued going
down. China’s import of soybean increased greatly. Thus, with sufficient supply
of raw material, the price of soybean meal declined sharply. According to CCM’s
price monitoring, the market price of soybean meal was USD389.99/t (RMB2,550/t)
in Feb. 2016, down by 19.59% YoY. Soybean meal contains around 0.6% of
tryptophan. Therefore, breeding enterprises prefer the cheaper soybean meal to
tryptophan to reduce cost.
Monthly market price
of 43% soybean meal in China, Jan. 2014-Feb. 2016
Source: CCM
About CCM:
CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta.
For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.
Tag: Henan Julong, tryptophan, 4-HIL