Xanthan gum Market Analysis in May, 2020

Market overview for this period

Raw materials:

In May, the overall price of domestic corn market continued to rise, the processing cost continued to rise, and the price of domestic corn starch market continued to rise. At present, the inventory of domestic corn starch industry is low. With the recent domestic epidemic situation alleviated, the demand for starch downstream picked up slightly. Supported by the demand, the domestic corn starch market price continued to be strong.

State Reserve corn is about to enter the market, and the price of corn is slightly weak. In the short term, with the support of demand, the domestic corn starch market price will continue to maintain strong operation. With the gradual easing of domestic corn market supply, the price of corn starch may fall slightly with the cost of raw materials.

Factory conditions:

Fufeng: at the beginning of this month, Fufeng was relatively calm, with normal construction and stable price. The latest news at the end of the month is that Fufeng has made personnel adjustment, the sales staff have changed their posts, and the sales that were originally responsible for the export sales of xanthan gum have been transferred to domestic sales. Then the news of Fufeng's price reduction came out one after another. It was said that the latest signed price of Fufeng was $100-200 lower than that of last month.

Meihua: affected by food grade bacteria, the price of food grade xanthan gum is still high and the delivery is still tense. It is said that Meihua has priority to issue new high price orders at present. The low price orders before the price increase have not been implemented for nearly two months due to the shortage of goods. Customers who are anxious for goods can only sign new high price orders to compete for high and low price delivery to implement the original contract. The price of petroleum grade products has dropped significantly, which is mainly affected by the reduction of petroleum production. At present, the number of orders has decreased a lot. At present, Meihua petroleum grade has obviously more stocks.

Deoson: Deoson has been stable from December to now, because Deoson's market positioning is high-end yellowThe original rubber market, for the time being, does not mean the price war between Fufeng and meihua. At present, Deoson is in a stable state, and the quotation remains unchanged. There is a real order to negotiate.

Jianlong: due to the high market price of xanthan gum, at present, Jianlong company has been put into production. The capacity of new production line and old equipment of Jianlong company is 1W tons, mainly producing food grade products. Petroleum grade products are not produced temporarily. The price of 80 items of food grade is 2000 US dollars, and that of 200 items is 2100 US dollars.

 ECHEMI summary:

In this period, the price of raw materials has increased significantly, and the cost of xanthan gum has increased slightly. However, the epidemic situation in foreign countries is still serious, and the overall demand is weak. Supported by the price of raw materials, the price of xanthan gum has not decreased too fast. However, due to the decrease of orders, the increase of inventory in various factories and the obvious decline of xanthan gum sales, all factories still have to reduce their prices. Under the leadership of Fufeng, the price is reduced by US $100-200. The price of Meihua food grade is not significantly affected by the delivery, but the oil grade is also adjusted.

Market forecast for the next period

ECHEMI forecasts:

In terms of raw materials, the price of corn starch is limited. It is expected that the price will be reduced later, and the cost of xanthan gum will be reduced. The impact of the epidemic has not been eliminated, the demand for xanthan gum market continues to be weak, and the export is blocked. In May, the number of orders received by the factory is insufficient. If the situation is still not optimistic in June, it will inevitably lead to overstock of inventory, and a new wave of price reduction promotion is likely to follow.

It is predicted that the price of xanthan gum will be a downward trend in June.