Source: Baidu

Prior to this, the domestic market price of folic acid continued falling after reaching its peak in mid-2015. In H1 2016, the figure of 98% feed grade folic acid averaged USD50.38/kg (RMB335/kg), largely down 79% YoY. Yet, in Feb. 2016, a number of domestic vitamin producers raised their quotations. Affected by this, the price of folic acid also started to go up and remained stable in the following months.

“The rise in June and July was mainly because leading producers had to suspend production in accordance with environmental policies,” disclosed an industry insider. “This upward trend may last for just a short while.”

For instance, it is said that Shandong Xinfa Pharmaceutical Co., Ltd. halted production of folic acid due to environmental regulations. According to the company, it has a folic acid production capacity of 1,200 t/a, claiming to be the largest in the globe. Affected by the company’s production suspension, there is less folic acid available in the market.

However, “There are still a number of small- and mid-sized folic acid enterprises in China, especially Zhejiang and Jiangxi provinces. Therefore, the following development of the market price of folic acid may not be that positive,” a salesperson from Changzhou Niutang Chemical Plant Co., Ltd. commented to CCM.

Monthly market price of folic acid in China, Jan. 2015-July 2016

Source: CCM

The 2016 G20 Summit is to be held in Sept. in Hangzhou City, Zhejiang Province, as a result of which active pharmaceutical ingredient producers in Zhejiang Province and the surroundings (Jiangsu Province, Jiangxi Province and Shanghai) will all be required to suspend production during the conference. Influenced by this, the supply of folic acid may get tight for a short term. Therefore, analyst CCM predicts that, in H2 2016, the market price of folic acid will keep stable or go up slightly, but is not likely to surge as what happened in 2015.

Due to the price surge in 2015, many domestic enterprises launched new folic acid projects. For example,

• Jiangxi Tianxin Pharmaceutical Co., Ltd.: a 500 t/a folic acid project in Tashan Industrial Park, Leping City, Jiangxi Province

• Jiangxi Zhangle Fine Chemical Co., Ltd.: a 500 t/a folic acid + folic acid intermediate project in Salt Chemical Industrial Park, Zhangshu City Jiangxi Province

• Shandong Hongzhi Biotechnology Co., Ltd. (wholly-owned subsidiary of Shandong Fangming Pharmaceutical Group Co., Ltd.): a 300 t/a folic acid project

• Anhui Shengda Bio-pharm Co., Ltd.: a 600 t/a folic acid + folic acid intermediate project

In the past two years, domestic enterprises have speeded up expanding production capacity of folic acid, which increased the overall market supply and therefore, is unfavorable for the rise in the market price.

In addition, large quantities of wastewater are discharged in the production of folic acid, taking a large sum of money for disposal. The costly environmental costs often hinder survival and further development of enterprises. Also, folic acid producers are under strict supervision by local environmental protection departments. Therefore, environmental regulations often pose direct impacts on the market price of folic acid.

This article comes from Vitamins China E-News 1608, 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. CCM is a brand of Kcomber Inc.

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Tag: vitamin

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