CCM: Niacinamide market affected by raw materials supply in 2015 08-30-2016

In Q4 2014, the domestic pyridine supply declined. It's expected that the price of niacinamide (vitamin B3) would go up in 2015.


In Q4 2014, the domestic pyridine supply reduced, mainly because operating rate in pyridine industry dropped dramatically. It is known that the operating rate of Chinese pyridine industry was merely about 50% by the end of 2014, while that of 2013 almost reached 100%. The low operating rate in the industry was influenced by paraquat market. According to the No. 1745 announcement jointly released by the Ministry of Agriculture, the Ministry of Industry and Information Technology, General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China, starting from 1 July, 2014, the registration and production permit of paraquat AS were revoked, and the production of paraquat AS was stopped.


Only the registrations for exporting paraquat AS were maintained and the production exclusively for export would be allowed. Paraquat is pyridine’s downstream market, the decreasing downstream demand led to low upstream operating rate. Chinese 3-methylpyridine (an important intermediate of niacinamide) was mainly supplied by pyridine enterprises, whose declining operating rate resulted in the shortage of 3-methylpyridine supply. At present, the domestic pyridine capacity amounted to 12,000 t/a. Calculated as the output ratio of pyridine and 3-methylpyridine, the capacity of the domestic 3-methylpyridine is about 40,000 t/a.

Market price of niacinamide in China, 2013-Jan. 2015

 Source: CCM

It is worth mentioning that the anti-dumping measures against pyridine had a certain impact on its supply decrease. On 21 Nov., 2013, China imposed anti-dumping tax against pyridine manufactured in Japan and Indonesia, whose rate was from 24.6% to 57.4% within five years. High tax rate led to decreasing imports. Therefore, the declining import volume worsen the decrease of the domestic pyridine supply.


In 2015, the domestic pyridine supply will continue to decrease, which might probably have an influence on the output and price of niacinamide.


For one thing, raw material supply was limited, so the domestic niacinamide output might go down. In fact, it is anticipated that the global niacinamide capacity is about 95,000 t/a in 2015 (under the circumstance that no manufacturer puts into production). Hereinto, the capacity of Chinese niacinamide is around 45,000 t/a, an increase of 5,000 t/a compared with that of 2013. Plants of Lonza Group and Vertellus Specialties Inc. (Vertellus) in China successively expanded production and put into production, respectively reaching 25,000 t/a and 5,000 t/a. In 2015, the dramatic increasing capacity of Chinese niacinamide should have driven up its output. However, the decreasing supply of 3-methylpyridine lowered the operating rate; and hence, niacinamide output was restrained. For another, soaring raw materials price drove up production cost.


The shrinking output and rising cost of niacinamide are likely to push up its price. On 26 Jan., 2015, niacinamide quotation was raised by 15% by Vertellus in advance, and so was 3-methylpyridine. At present, even though other domestic manufacturers have intention to raise price, price won’t increase that much in short term for the excessive supply over demand.

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: niacinamide

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