China's market price of vitamin B2 (VB2, =riboflavin) has kept rising.
According to CCM's price monitoring, in May 2016, the figure of 80% feed grade
VB2 reached USD43,351/t (RMB285,635/t), up 124% YoY, hitting the highest record
since 2008.
This was mainly thanks to the price rising of domestic producers. In April,
Shanghai Hegno Pharmaceutical Development Co., Ltd. (Hegno) was said to raise
its quotation for VB2 to USD42.5/kg (RMB280/kg) for May's orders. Shandong NB
Group Co., Ltd.'s spot price also reaches USD42.5/kg (RMB280/kg) at present.
Hubei Guangji Pharmaceutical Co., Ltd. (Guangji Pharmaceutical), the largest
Chinese VB2 producer, has suspended offering quotations since April.
So far, the VB2 production has been concentrated. The three producers above are
the leading ones, 80% of the domestic sales. Early in 2007, domestic VB2 market
price suffered from falls after skyrocketing. From 2008 to 2014, the overall
market was in a downturn, putting the producers under great business pressure
but improving the production concentration of this industry. Ever since 2015,
leading producers seem to have a tacit understanding and have continued raising
their sales prices. Thus, the overall market price has kept going up, despite
the fluctuations.
Monthly market price of 80% feed grade vitamin B2 in China, Jan. 2015-May 2016
Source: CCM
Leading vitamin B2 producers in China, as of June 2016
|
Producer
|
Production capacity, t/a
|
Remark
|
|
Hubei Guangji Pharmaceutical Co., Ltd.
|
4,500
|
Guangji Pharmaceutical & its
subsidiary Guangji Pharmaceutical (Mengzhou) Co., Ltd. both produce VB2
|
|
Shanghai Hegno Pharmaceutical Development
Co., Ltd.
|
2,000
|
/
|
|
Shandong NB Group Co., Ltd.
|
600
|
The company reduced its capacity by 50%
from 1,200 t/a to 600 t/a from 21 Dec., 2015
|
Source: CCM
Domestic producers are likely to largely improve their overall performances,
given the soaring VB2 market price and falling raw material price at present.
As VB2 is produced by fermentation, raw material and energy take up a large
part in production costs, especially corn starch (raw material for VB2). The
production of one tonne of VB2 needs 18-20 tonnes of corn starch. Since H2
2015, China's market price of corn kept sliding, affected by the increasing
output and huge inventory in recent years. This has pulled down the market
price of corn starch, which showed record lows from Jan. to May 2016.
Thanks to this, producers have lowered the production costs and thus largely
improved gross profit. For instance, Guangji Pharmaceutical announced a large
YoY rise of 56.25% in its Q1 2016 revenue and its net profit reached USD3.50
million – RMB23.06 million, vs. loss in Q1 2015.
Monthly market prices of corn & corn starch (northern) in China, Jan.
2014-May 2016
Source: CCM
China's exports of VB2 (HS code: 29362300) also showed an upward trend.
According to China Customs, from Jan. to April 2016,
-
Volume: 805.62 tonnes, up 20.89% YoY
-
Value: USD25.33 million, up 26.43% YoY
-
Price: USD31.4/kg, up 4.6% YoY
The soaring domestic market price of VB2 slightly boosted the export price.
China mainly exports 80% VB2, 70% of the national export volume. Hegno and
Guangji Pharmaceutical are the top two exporters, 90% of national figure.
China's exports of vitamin B2, Jan. 2015-April 2016
Source: China Customs
This article comes from Corn Products China News 1606, CCM
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Tag: corn vitamin