Mixed demand outlook for vitamins, greater momentum behind amino acids

By Jane Byrne contact

- Last updated on GMT

© GettyImages/Waldemarus
© GettyImages/Waldemarus

Related tags: Vitamin C, methionine, Dsm, ASF, covid-19

Volumes of European vitamin imports and Chinese exports were above historic averages for the first half of this year, according to Kemiex data.

However, the Swiss feed and food additives trading platform anticipates that the second half of 2020 may see lower than usual trade levels in vitamins, given the ongoing fallout from the COVID-19 pandemic, bottlenecks at livestock processing facilities and new African Swine Fever (ASF) cases in Europe.

While some end-users of feed additives, such as premix companies, report stable demand, other buyers have decreased their typical raw material procurement levels by around 30%, said Kemiex.

“Purchasing managers remain in a conservative or wait-and-see mode despite favorable price levels, albeit closing first contracts for 2021. Inventories outside China appear sufficient to cover them into Q4, it seems inventories in China are building too as the global marketplace remains satisfied – for the moment,”​ said Stefan Schmidinger, partner, Kemiex.

The Kemiex Vitamins Index, therefore, continues its slightly negative momentum amid such adequate supply and inventories, as well as the mixed demand outlook.  

Vitamin C Imports to Europe from China (002)
© Kemiex

Vitamin price trends  

Looking at developments around vitamin C pricing, a mono producer is said to have stopped offering this week creating some spot market opportunities within Europe. “While there is some temporary upward price pressure, we do not expect Q2 price levels again anytime soon,” ​Schmidinger told us.

Kemiex noted that global vitamin E prices have recently showed soft negative momentum, shifting down to levels of US$7.20-7.80, while some Chinese sellers insist on reference prices +20% higher. The market is expecting an update in November on Yimante, the 75/25 joint venture of DSM and Nenter, which is reportedly set to start producing again in late Q4 2020 or Q1 2021.

The vitamin Bs sector is marked by ample supply and subdued demand, they added.

As regards Vitamin B6, the data intelligence team said Shandong, China headquartered, Xinfa Pharmaceutical, has passed an environmental compliance test for its new US$34m project that is set to produce 1,500 tons of vitamin B6 and 2,000 tons of Vitamin D3 a year, as well as significant quantities of trisodium phosphate and sodium chloride.

Vitamin B3 and B5 Imports to Europe from China
© Kemiex

Amino acids

Contrary to its vitamin price tracker, the Kemiex Amino Acids Index rebounded softly in September.

“It seems that some compound feed companies are looking to increase the level of feed additives in their formulations as they are also confronted with higher raw material costs for soybean meal and other raw material. Looking at the latest USDA WASDE report, global ending stocks for corn and soy are estimated to come in lower, adding upside risks to prices.”

Some Chinese amino acid manufacturers are facing continued cost pressure for starting materials like corn - Dalian corn futures rose +9% month on month (MoM) and +17% over two months, said the team.

Round-up of methionine developments

There have been several developments around the essential amino acid, methionine, beyond the news that the Chinese authorities have terminated their anti-dumping investigation, with no consequences, and that Evonik is set to consolidate its DL-Methionine production into three regional hubs, globally.  

Kemiex reports that the European Commission recently authorized the use of L-Methionine produced by Corynebacterium glutamicum KCCM 80184 and Escherichia coli KCCM 80096 in use by CJ CheilJedang as a feed additive for all animal species.

That Swiss team has also tracked methionine capacity projects elsewhere, revealing that China’s NHU is ​has put 100,000 tons per annum in trial production, while another 150,000 t/a are in the construction and design phase.

Moreover, Kemiex said a new market entrant from Sichuan, which had delayed trial production amid severe flooding, now looks set to resume. “It is expected to bring additional methionine capacity of between 60-100,000 t/a  by the end of 2020; exports are set to get underway from mid-2021, if the company delivers on its promise."

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