Vitamin B5 (VB5, calcium pantothenate) has been hot and highly priced in China
since late 2015. As of March 2016, China’s average market price of 98% feed grade VB5 surged to USD55,058/t (RMB360/kg), over 5 times the figure last year.
This surge was mainly because of the price up-regulations by leading producers.
In particular, Yifan Xinfu Pharmaceutical Co., Ltd. (Yifan Xinfu), the largest
global supplier (40% of the global production capacity), has relatively strong
voice in pricing VB5. In March, the company raised its quotation for VB5 from
USD46.45/kg (RMB300/kg) in Feb. to USD55.74/kg (RMB360/kg).
As the domestic environmental protection policies got stricter, the outdated
production facilities were closed down. This lowered the producers’ operating
rate, thus tightening the domestic supply of VB5 in the short run. And the
producers took this opportunity to raise price.
The VB5 manufacturers benefited a lot from the soaring price.
Take Yifan Xinfu as an example. In Q1 2016, the company’s average transaction
price of VB5 surged by 50.48% QoQ. Correspondingly, its net profit is predicted
to increase by 50%-80% YoY, mainly thanks to the surge in average sales price
of D-calcium pantothenate. Preliminarily, the average transaction price of D-calcium
pantothenate in Q2 soared by 200%+.
Monthly market price of Vitamin B5, Oct. 2014-March 2016
Source: CCM
In Jan. and Feb. 2016, China’s export volume of VB5 slid MoM, whereas the
export value increased. This indicated a rise in the export price of VB5. To be
specific,
Volume: 2,197 tonnes, slightly up by 2% YoY
Value: USD25.51 million, up by 21% YoY
The main export destinations included Belgium, the US, the Netherlands and
Brazil.
In the short run, China’s market price of VB5 is expected to remain high. Under
the environmental protection pressure, leading manufacturers, such as Yifan
Xinfu, will continue the price regulation.
However, in H2 2016, the price may go down. In Dec. 2015, Brother Enterprises
Holding Co., Ltd. (Brother Enterprises), a listed company producing vitamin B1
and vitamin B3, raised funds for a 5,000 t/a VB5 project (2 production lines:
4,000 t/a D-calcium pantothenate and 1,000 t/a panthenol). The project will
start operation in Q3 this year. This is expected to ease the tight domestic
supply of VB5 and to pull down the market price.
“After Brother Enterprises’ project goes into production, the market
competition will get intensified,” Yifan Xinfu mentioned on the Investor
Relation Management platform on 19 Feb.
This will challenge Yifan Xinfu's sales and management capability. Yet, given
the company's long-term and strenuous efforts in expanding the global VB5
market, its leading position won’t be easily changed.
* Note: In China, VB5 is mainly used as a feed additive. According to the
latest requirements from the Ministry of Agriculture, its addition ratio to the
feed for piglets is the highest – 30-40 mg/kg. Even so, this isn’t much to
cost.
This article comes from Vitamins China E-News 1604, CCM
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Tag: Vitamin feed