April 4, 2017
New vitamin E producer in China toughens market competition
An eFeedLink Exclusive
Rebounding from record low levels, vitamin E prices surged about 110% during the first ten months of 2016, rising from RMB36/kg to RMB75/kg. However, prices doubled down from the two-over year high, sliding to RMB47/kg before the first quarter ended for 2017.
Vitamin E market's rally in 2016 was mainly due to a lack of raw ingredient methyl acetoacetate, resulting from reduced production of acetyl ketene by a major Chinese producer due to strict environmental controls. This worsened when a small producer, Jilin Beisha, halted operation later as a fire broke out in its plant.
Meanwhile, during August, Hubei Nengte Technology, a subsidiary of Fujian Guanfu Household Group, announced its construction of a 20,000-tonne capacity vitamin E plant. By October, Nengte invested in US company Amyris Biotechnologies, hence dominating the supplies of vitamin E intermediates from the company.
With supplies of vitamin E poised to increase prominently in prices softened swiftly since October.
More importantly, the oligarchic vitamin E industry, which used to be dominated by four major players in the past, has a new boy in the block now with consistent supplies of cheap raw ingredients. As Nengte has started to produce commerciallysince March, the tough fight for market shares will drag prices lower.
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