In early Sept. 2016, Ningxia EPPEN Biotech
Co., Ltd. (Ningxia EPPEN) reduced its sales price of 99% threonine to USD1.8/kg
(RMB12/kg), similar to quotations from other leading domestic threonine
producers like Meihua Holdings Group Co., Ltd. (Meihua Bio). Prior to this, the
domestic market price of threonine averaged USD1.78/kg in Aug.
Source: Baidu
In fact, threonine price has stopped rising
and started to fluctuate since the beginning of Q3.
Monthly market price of 99% threonine in China, Jan. 2015-Aug. 2016
Source: CCM
The fluctuation of domestic threonine price
in Q3 2016 was attributed to various reasons.
- Price rise in July
1. Environmental pressure
Several groups of inspectors were assigned
by the Ministry of Environmental Protection of the People's Republic of China
to 7 provinces / autonomous regions (like Ningxia) for environmental
inspection. Meanwhile, it was reported that the current pollution discharge
fees will be replaced by environmental protection tax, which may lead to higher
production costs.
In this context, many threonine producers raised their quotations, and the
overall market price was up by 9.09% MoM.
2. Production suspension
Domestic threonine manufacturers tend to
suspend or reduce production for maintenance in summer, resulting in decreased
supply and increased market price.
- Price fall in Sept.
1. Producers’ price strategy
Many feed enterprises stocked up before the
Mid-autumn Festival (mid-Sept.) and National Day (early Oct.). Moreover, as new
semester comes, increasing amount of meat is needed in schools, boosting the
demand for livestock and further, for threonine, in the short term.
Many threonine producers reduced their quotations to boost sales. For instance,
Ningxia EPPEN lowered quotations for its amino acids, including threonine, for
larger sales.
2. Weakening demand
Affected by the high temperature, the
domestic number of pigs on farm started to decline in Q3. According to the
Ministry of Agriculture of the People’s Republic of China, July saw the first
falls in the number of both adult sows and live pigs since March:
Adult sows: 37.52 million, down 0.2% MoM
and 3.2% YoY
Live pigs on farm: 375.96 million, down
0.1% MoM and 2.4% YoY
This weakened demand for feed, pulling down the threonine price.
3. Falling corn price
The corn (raw material for threonine) price
continued falling in Q3. According to CCM’s price monitoring, the domestic
market price of corn averaged USD271.47/t (RMB1,813/t) on 13 Sept., down 19.49%
over Sept. 2015. This possibly dragged down the threonine price.
Given the continuous interactions of the aforementioned factors, the domestic
threonine is predicted to keep fluctuating in the coming period, according to
analyst CCM.
Monthly market price of corn in China, Jan.
2014-Aug. 2016
Source: CCM
Notably, China’s exports of threonine also
increased in July 2016. According to China Customs, the export volume reached
28,900 tonnes, up 22.99% YoY, and totaled 218,500 tonnes from Jan. to July, up
43.75% YoY. The significant growth in exports this year was mainly due to the
slack domestic demand for threonine.
China's export volume of threonine, 2012-2015
& Jan.-July 2016
Source: China Customs
This article comes
from Amino Acids China E-News 1609, CCM
About CCM:
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Tag: threonine amino acids