More Challenge is on the Way
China Veterinary API Market Recovered from COVID-19 Attack
The Novel Coronavirus (later named as COVID–19) associated epidemic outbreak in Wuhan, the capital city of Hubei Province, China on January, gradually spread to the whole country, now was basically under control since mid-March. The veterinary APIs industry has been impacted to some extent.
After Wuhan City closedown on January 24, the lockdown spread across the country in the following weeks, traffic was disrupted, logistics was blocked, and the supply chain was cut off. For veterinary medicine raw materials, it formed lots of regional micro-market, in some regions, it resulted in shortage crisis, and wide spread price rise and distortion.
After the middle of February, production and logistics are gradually resumed. By the end of March, the influence of the epidemic had been gradually eliminated, and the supply and demand almost come back in balance.
The Pandemic Worsen Abroad, Export Disrupted
At the time when the epidemic in China has been eased under control, the number of the infected cases in the rest of the world are on rise since March and the situation is turning more and more grave.
As a result, the prices of some veterinary APIs and feed additives have gone up sharply. Taking vitamin C as an example, the price has risen significantly, reaching around 30 RMB per kilo, an increase of nearly 50%. While the price of Vitamin D3 has more than doubled.
Fearing a total lockdown over the world on the spread of the disease, some manufacturers have recently given priority to foreign trade and increased their share of exports,
However, with the continuous worsening of the pandemic, more and more export orders were cancelled or suspended since the end of March due to the impact of the foreign blockade, and such situation has a tendency to prolong. how long such substantial impact on local market supply and prices will last will depend on how well that country control the epidemic.
The price of vitamins A and E continues to rise, Please refer to our last NEWSLETTER (issue 2020004 dated March 21,2020) Current Impact of CORONAVIRUS on Some Vet APIs and Vitamins
When this issue of newsletter is released, the update price remain unchanged.
Vitamin D3 Price Jumped 200% within Two Weeks
The article source:China feed industry information network (edited)
The latest surge in the price in the past two week,it’s vitamin D3, the market price has doubled, some manufacturers even quoted a price of 660 yuan/kg. Last week, in European market, D3, VA and VE prices rose sharply, with a quotation 50-53 euros/kg, approximately 10 euros/kg higher than the previous week. In the same week the domestic D3 market quotation 320-380 yuan/kg, 50 yuan/kg up compared with the previous week.
Look at the following graph, D3 market of the previous years, although the price fluctuates, but 200 yuan is the ceiling. Since the year of 2017,however, it started a variety of extreme trend, the range of price oscillation widened, the highest point exceeded 500 yuan/kg.
What was happening then?
The upstream raw material of vitamin D3 is cholesterol, which is derived from lanolin cholesterol. The production enterprises mainly include Garden Biochemical which is comes locally from China, Japanese NFC, Indian Dishman, and Singaporean NK.In recent years, Garden Biochemical,who supplies the highest production capacity in China, has improved the production process to reduce the cost, expanded the cholesterol production capacity to 200 tons, strengthened the competitiveness, and increased the voice in vitamin D3 and its raw material market. Environmental protection storm in the year of 2017-2018 raised the threshold of entry to the industry.
Effective from July 1, 2020,the national standard (GB 7300 202-2019) (feed additive vitamin D3 oil) shall be implemented, which regulates lanolin cholesterol as starting material of vitamin D3 oil, and limits the use of brainstem origin cholesterol. Production of Indian cholesterol and overseas D3 production is then limited.
The price increase must be due to tight supply, which fuse was lit by the rapid spread of invisible novel coronavirus. Gelatin used as coating material is mainly imported and is in short supply.
Tight supply coupled with low inventory has led to a recent surge in the D3 market.
In recent two weeks, overseas pandemic situation has become more and more serious. The highest level of prevention and control measures are announced, cities closed, road blocked and ports jammed, factories have shut down and limited production.
The second quarter is still a hard time of pandemic spread, lots of resistance for export, domestic D3 market must be oscillating at a high level.
A new Garden Biochemcial project is scheduled to go into operation in the first half of 2020, including a feed-grade Vitamin D3 oil project with an annual output of 750 tons.
Due to the rapid deterioration of the pandemic all over the globe, the change of supply and demand should be paid more attention to in the following period, as well as the relocation of the subsidiary of Garden Biochemcial and the launching of new projects.
We are in a position to supply the following vet APIs for prompt shipment:
Tilmicosin Phosphate 1200kgs
And do OEM/ODM manufacturing of premix?