The tide of rising raw material prices is ferocious

Vitamins are soaring! Amino acids are on the rise! Recently, the rising tide of raw material prices is fierce. Industry analysts believe that some vitamin prices have risen sporadically before, which is called "thunderstorm and raindrop". Nowadays, under the pressure of environmental protection, not only small and medium-sized enterprises which mainly produce raw material drugs and intermediates have been shut down, but also many traditional pharmaceutical giants have been shut down and rectified. The raw material prices caused by supply shortage are also being rectified. The substantial increase has made the production cost increase continuously, especially the price increase of vitamin products has really come.

Raw Material Shortage Price Rising

Market information shows that the price of vitamins and other raw materials has fluctuated significantly since the second half of 2017, and the recent price increase is even more alarming. If vitamin A rises from 145 yuan/kg to 850 yuan/kg, vitamin E from 37 yuan/kg to 140 yuan/kg, vitamin C from 32 yuan/kg to 60 yuan/kg, and biotin from 64 yuan/kg to 220 yuan/kg. As vitamins continue to climb, the price of trace elements has doubled. For example, ferrous sulfate rose from 0.8 yuan to 4.5 yuan, zinc oxide from 15 yuan to 35 yuan, zinc glycine from 6.8 yuan to 18 yuan, Choline Chloride from 4.7 yuan to 12 yuan, copper sulfate to 16.0-16.5 yuan, manganese sulfate to 4.8 yuan; in addition, Amino Acids jumped up, in which tryptophan rose from 66 yuan to 115 yuan and was still out of stock...

Relevant monitoring data show that in May and June 2017, the price of vitamins began to rebound, reaching a historical high in October, but on November 28, the price of vitamins reached a new high. Among them, the price of VA reached 840-850 yuan/kg, and the price of VE reached 110-120 yuan/kg, which was more than five times higher than that of 2016.

It is understood that on October 31, 2017, a major fire accident occurred at the BASF CITRAL factory in Germany, which had a serious impact on the supply of vitamin A and E in the global market. BASF is the world's largest citral producer and the world's second largest producer of VA, with a global market share of 26%. Affected by the accident, the production of vitamin series products in the factory has been greatly reduced, among which the production of VA products will be reduced by about 700-1000 tons. Its production of VA 2400 tons in 2016 is expected to resume normal production by April 2018 due to the accident.

Drive Production into the Era of High Cost

In fact, before the BASF accident, the global market for vitamin A was already in a tight state. Since the summer of 2017, all walks of life in China have been facing the impact of high-pressure environmental protection policies. Many vitamin manufacturers have stopped production, and the supply of vitamin products has been restricted. Prices have soared. During this period, Chinese producers quoted higher prices for vitamin A than European producers, so many orders were signed by European producers in the fourth quarter of 2017.

Some end users said they had been notified that the supply of BASF citral plant would not be normal until March 2018, so vitamin A would be difficult to meet production requirements for some time to come. Based on the above factors, it is expected that the severe situation in the global vitamin A market will not be alleviated until at least the second half of 2018.

In addition, the rising prices of amino acids and mineral trace elements are also the result of the periodic tightening of supply caused by the environmental storm. In recent years, China's amino acid industry has developed rapidly, but in 2017, due to the increasing efforts of environmental protection, the elimination and withdrawal of small and medium-sized manufacturers exceeded expectations, resulting in the reduction of raw material supply, together with the prolongation of shutdown time in production links and the reduction of production capacity.

Under the influence of these two factors, the market in the second half of 2017 was in short supply and the market continued to rise. In addition, the trace element ferrous sulfate has jumped continuously in the past two months, from 0.9 yuan/kg to 4.8 yuan/kg, which is amazing. At present, ferrous sulfate and zinc sulfate in the market are basically in a state of shortage and price stability, which can not meet the needs of the pharmaceutical and feed industries, and the possibility of price decline in the near future is still slim.

Pharmaceutical industry analysts said that with the intensification of environmental protection verification and the government's acceleration of flight inspection and GMP requirements for pharmaceutical enterprises, the raw material pharmaceutical industry represented by vitamins has entered a shuffling period. Not only will small and medium-sized raw material manufacturers continue to face shuffling pressure and be forced to withdraw, but also the days of some traditional large enterprises are more difficult, and the transformation and upgrading are imperative.

In the eyebrows. Therefore, the shortage of vitamins and other raw materials is difficult to alleviate in the short term, and the rising price becomes inevitable. Then, it will lead production into a high-cost era. The overall market of products may become a new normal, and this change is likely to be replicated and repeated in other areas of APIs. The industry must be fully aware of this situation and take precautions.