The APIs market in December generally remains stable and weak, continuing the lingering trend since August. The supply side is widely and deeply affected by the epidemic, with normal production facing increasing challenges and downstream demand continuing to be sluggish, trade channels being cautious in replenishing stocks, and insufficient market confidence.
On December 7, the government announced the lifting strict epidemic control measures, and the movement of people gradually resumed. However, the uncontrolled spread of the epidemic and the spontaneous reduction of movement of people caused severe labour shortages in production enterprises, logistics and transportation, and the economic operation was severely challenged.
In addition, as the Spring Festival is approaching, the holiday, which is usually two weeks ahead, is even earlier this year, and many production enterprises have been in a state of shutdown. Express delivery and cross-region logistics are scheduled to stop receiving orders one after another after January 3.
The reference transaction price is CNY435/kg, down 1.60% from the previous month, with prices hitting a new low for the year. The dramatic short-term drop in prices coincided with the unusual decline in pig prices this month, again demonstrating the close correlation between florfenicol and pig prices.
Industry analysts believe that price cuts to reduce inventories are the main reason for the price retreat, and it does not rule out the possibility of further dips until demand improves next year.
The reference transaction price is CNY520/kg.
The graph shows that the doxycycline cost in 2022 has been below CNY600 /KG, significantly falling from the price in 2020 and 2021. The increase in market supply since this year is accompanied by the expectations of new production capacity. While demand is weak, the whole market has become a buyer's market, with more options for the downstream. The extent to which new capacity can compete with the existing one and gain customer acceptance will depend on the quality and the quality-cost efficiency.
At the beginning of December, the price went up as high as CNY310/KG, but failed to sustain and fell to around CNY301/KG after mid-December, down 1.30% month-on-month and 5.6% year-on-year. From a demand perspective, demand from the pig industry still supported prices.
But the tension on the supply side has eased. The intention of withdrawing funds has caused the supply channels to scramble for orders and sell at reduced prices.
Analysts believe the market will be relatively calm around the Spring Festival, with little room for further downward movement after the holiday.
The price trend is the same for products such as Tilmicosin, which uses Tylosin as raw material.
China’s Paracetamol production accounts for more than 60% of the global total, with a relatively concentrated domestic production capacity. The price and sales of this product rose significantly when the pandemic broke out in early 2020.
Since mid-December, the demand for antipyretic drugs has increased sharply because of the spurt in the domestic epidemic, and external supply has been limited, with market prices rising strongly.
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The domestic vitamin market has been running weakly and steadily for a few months. The current market situation can be summarized as follows:
- The regular production order of the factory has been severely disrupted by the sudden spread of the epidemic across the country.
- Domestic distribution dealers, trapped by inventory and financial pressures, are selling aggressively.
- The downstream market is weak in future prices, dominated by just-demand purchases.
At a time when the outlook of the domestic economy and epidemic are uncertain, rational demand cannot pull prices, factory stoppages, and quotation increases do not bring panic rush and solid expectations of price increases. There are no good reasons or risky moves by factories to raise prices.
Some mainstream products, such as vitamin A and vitamin E, have been consolidating at the bottom of the range for a long time. The buyers still need to prevent the market from being triggered upwards at any time after entering the winter.
The price of vitamin A has been low for a long time, with a reference quotation: CNY95/KG.
Adisseo said on its interactive platform on October 27 that it had decided to reduce VA production to control and optimize costs temporarily.
DSM decided on November 21 to suspend production at its Swiss plant for two months, starting on January 2. They intend to cut production to stop the price decline. So far, no dramatic market reaction from the market has been observed.
Reference quotation: less than CNY80/KG. The market price is slightly weaker.
Prices tend to rise in Q4 and Q1, the peak demand season for vitamin E. The reality of this year has broken this general rule.
DSM's planned production halt at its Swiss plant from January 2023 also impacts VE supply. On December 26, due to the impact of the epidemic and other factors, NHU Vitamin E production line is scheduled to shut down for maintenance from January 1, 2023, which will last 6-7 weeks.
The current mainstream price is CNY150-160/KG.
The price of D-Calphan is volatile periodically. After experiencing a sharp decline in the previous period, the price tends to moderate, and the overall cost is stable with a very slight fluctuation.
Pantothenate lactone, an essential raw material of D-calphan, is critical for the stability of the calcium pantothenate supply. Nearly 60% of China's production capacity is affected by environmental protection policies as this raw material is produced by a chemical process. It is necessary to pay attention to the updates of winter air pollution control in northern China.
The reference price of K3(MSB)is CNY160-165/KG.
The price still maintains at the same high level as last month. Many manufacturers have a strong willingness to support prices because the rising costs driven by the imported chrome ore have not been effectively resolved within a short time.
This month, Zhenhua Chem, Brother Tech, Vanetta, Luliang Peace and other companies have announced maintenance plans, generally for 4-6 weeks. This period is superimposed by the Spring Festival holiday and the recent production suspension caused by the epidemic. It is not expected to affect the normal resumption of production after the holiday. Therefore, it will not result in a reduction in market supply.
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AMINO ACIDS MARKET
The Russia-Ukraine war has forced the spread of food protectionism, reducing grain imports and raising prices. China imported 19.15 million tons of corn between January and November, down 26.9% YoY, with corn prices approaching historic high amid a tightly balanced market. This supported amino acid market prices to continue at high levels. Total exports of lysine and threonine fell 28% and 18% YoY, respectively, from January to November.
Due to the epidemic's impact, logistics were hampered, the market was dull, and prices were stable and turned weak.
The current mainstream factory price of 98.5% L-lysine HCL is CNY9400/MT.
The current mainstream price of L-Threonine is CNY9600/MT.