June 4, 2004

Competition Heats Up in China and Global Vitamin C Markets
 

An eFeedLink Exclusive Report

Buoyed by strong demand seen in the few months prior to and immediately after the Chinese New Year period, which fell on late January, price quotes of China's vitamin C raw material have remained at the US$9.00-10.00/kg level from end-2003 to February 2004. By the end of February 2004, price quotes of vitamin C raw material for the export markets had fallen below the US$9.00/kg level to US$8.40/kg and they has been on the decline since then.

Review of Price Quotes of China's Vitamin C Raw Material from January to April 2004

The average monthly price quotes of vitamin C raw material for export in January, February, March and April were US$9.50/kg, US$9.20/kg, US$7.60/kg and US$5.70/kg respectively. For the first quarter of 2004, price quotes for vitamin C raw material for export had dropped by 10.6%. Prices of vitamin C raw material in the domestic Chinese market have been weighed down by the weakening export price quotes.

The average monthly price quotes of vitamin C raw material for the domestic Chinese market in January, February, March and April were RMB87.5/kg, RMB79.0/kg, RMB72.5/kg and RMB55.0/kg respectively. On a quarter-to-quarter basis, domestic price quotes of vitamin C had fallen by 9%.

Average Export Prices of China's Vitamin C Products from January to March 2004     

The average export prices of China's vitamin C products, including vitamin C raw material and its derivatives, for January, February and March were US$5.56/kg, US$5.71/kg and US$5.74/kg. During the first quarter of 2004, export prices of vitamin C raw material and its derivatives had remained relatively stable. The transacted volume in the first quarter 2004 was higher than the same period last year. 

With the acquisition of Roche's vitamin business, DSM group is a giant in the global vitamin C production industry. The expanded DSM group would bring in more competition to the world's vitamin C markets in time to come.

China's Top Four Vitamin C Producers     

Currently, China's four largest vitamin C producers are Northeast General Pharmaceutical Factory; Jiangsu Jiangshan Pharmaceutical Co., Ltd; HeBei Welcome Pharmaceutical Co., Ltd and Weisheng Pharmaceutical (Shijiazhuang) Co., Ltd. In terms of export market share, the four pharmaceutical groups are close to each other. Northeast General Pharmaceutical Factory is in the lead with 29.78% of the export market share.

There are talk about possible alliance between pharmaceutical groups in China. If this happens, it could lead to another round of keen competition in the Chinese vitamin C market. The current three largest vitamin C-procuring regions in the world are the European Union, North America and Southeast Asia region.