Jim Schultz, CEO & Founder, Green Wave Ingredients (GWI)10.31.14
Overall, customer demand for dietary supplements this year is stable, but market trends for other ingredients are quite different. Some are trending up, but in short supply, while others are experiencing a soft market. These market variations are a result of manufacturer output changes due to pollution control, overcapacity, and procurement of starting materials.
It is a good time to review the market trend and start to plan for 2015.
Vitamins
Vitamin C Series
From our mid-year report, we advised: “Chinese manufacturers are trying to increase the price so that they could recover from their losses, but also have to face the fact that output could easily be over demand and they have to move inventory to keep the business going.”
Currently, vitamin C remains flat due to oversupply even though the starting material price (corn) is on the rise by 10-20%.
Vitamin B1/B6
The price remains at high levels, but may come down gradually when production is resumed next year.
Vitamin B2
It is reported that DSM will shut down production for 6 weeks for plant maintenance; BASF increased price for both feed and food grade by 20%. Major Chinese manufacturers also announced price increases. Currently, the U.S. market is firm and we are looking at an upward trend for vitamin B2.
Vitamin B5
As predicted from our last report, the price is coming down slowly. More and more manufacturers are developing production lines for B5 starting material and we are seeing this trend will continue to first quarter of 2015.
Vitamin B12
Output was limited by one major manufacturer due to pollution control issues. Demand is a little greater than supply, but overall, it is balanced and the price is firm.
Vitamin D3
From our mid-year report, the output of D3 is limited due to unstable production from Chinese manufacturers. The starting material is in short supply, and although manufacturers are trying to fulfill blanket orders, there is no material available for spot purchase. We predict this trend will continue into the first quarter of 2015.
Folic Acid
We have not provided updates on this ingredient in our previous reports, however, the price has increased drastically due to limited supply. Manufacturers faced a flat market for years, and production was shut down due to pollution control, so availability is slim.
Amino Acids
L-Cysteine and L-Cystine
The current market is stable.
L-Arginine
Sales increased in October; this may be due to pre-holiday production preparation. However, the market is still flat due to overstock. The material is not only from Chinese manufacturers, it includes Korea, Japan, and Indonesia. With an increase in demand now, the price might increase slightly but will remain low and stable for the long term.
L-Leucine
We believe the price of L-Leucine will remain stable at this time. New manufacturers with fermentation technology have been able to present low prices, however, hydrolyzed material is preferred in the market at this point.
L-Valine and L-Isoleucine
Prices of these are low due to increased production. We predict major manufacturers will adjust production, which may affect price; it’s recommended to place a blanket order for the remainder of the year.
L-Glutamine
The market has been low in the past three months, but quickly bouncing back.
As suggested during our last report, blanket orders are recommended as the prices will rise through the end of the year.
Taurine
Ample supply has resulted in a soft market. New manufacturers with strong backgrounds have emerged, and some established manufacturers expanded their production line. Prices are historically low, and it’s recommended to lock this price with a blanket order. The current market will gradually increase in the first quarter of 2015.
Sweeteners
Xylitol
The price is stable.
Stevia
This is short in supply due to limited harvest from farmers. It will take one year for the market to rebound. We suggest customers evaluate stock as we predict the price will continue to increase for the rest of the year and into the first half of 2015.
Sucralose
The market is currently stable and low, and profits from manufacturers are slim, a result of over production. Some manufacturers have already ceased production; it’s predicted that 3-5 competitive manufacturers will survive in the long term.
Specialty Ingredients
CoQ10
The price remains stable.
Creatine Monohydrate
Good availability with low, stable pricing.
Caffeine
The starting material costs for caffeine increased in April and May, which led to a shortage and price increase from April to May. The price is now back at normal levels and remains stable.
MSM/Sodium Hyaluronate/Glucosamine
It’s a good time to lock in a blanket order for these ingredients. MSM will remain stable as the supply and market demand is balanced. The current production technology will remain the same. Sodium Hyaluronate will be on a downward trend, as production increased and price competition is fierce. Glucosamine will keep stable due to balanced supply and demand or maybe a little soft.
It is a good time to review the market trend and start to plan for 2015.
Vitamins
Vitamin C Series
From our mid-year report, we advised: “Chinese manufacturers are trying to increase the price so that they could recover from their losses, but also have to face the fact that output could easily be over demand and they have to move inventory to keep the business going.”
Currently, vitamin C remains flat due to oversupply even though the starting material price (corn) is on the rise by 10-20%.
Vitamin B1/B6
The price remains at high levels, but may come down gradually when production is resumed next year.
Vitamin B2
It is reported that DSM will shut down production for 6 weeks for plant maintenance; BASF increased price for both feed and food grade by 20%. Major Chinese manufacturers also announced price increases. Currently, the U.S. market is firm and we are looking at an upward trend for vitamin B2.
Vitamin B5
As predicted from our last report, the price is coming down slowly. More and more manufacturers are developing production lines for B5 starting material and we are seeing this trend will continue to first quarter of 2015.
Vitamin B12
Output was limited by one major manufacturer due to pollution control issues. Demand is a little greater than supply, but overall, it is balanced and the price is firm.
Vitamin D3
From our mid-year report, the output of D3 is limited due to unstable production from Chinese manufacturers. The starting material is in short supply, and although manufacturers are trying to fulfill blanket orders, there is no material available for spot purchase. We predict this trend will continue into the first quarter of 2015.
Folic Acid
We have not provided updates on this ingredient in our previous reports, however, the price has increased drastically due to limited supply. Manufacturers faced a flat market for years, and production was shut down due to pollution control, so availability is slim.
Amino Acids
L-Cysteine and L-Cystine
The current market is stable.
L-Arginine
Sales increased in October; this may be due to pre-holiday production preparation. However, the market is still flat due to overstock. The material is not only from Chinese manufacturers, it includes Korea, Japan, and Indonesia. With an increase in demand now, the price might increase slightly but will remain low and stable for the long term.
L-Leucine
We believe the price of L-Leucine will remain stable at this time. New manufacturers with fermentation technology have been able to present low prices, however, hydrolyzed material is preferred in the market at this point.
L-Valine and L-Isoleucine
Prices of these are low due to increased production. We predict major manufacturers will adjust production, which may affect price; it’s recommended to place a blanket order for the remainder of the year.
L-Glutamine
The market has been low in the past three months, but quickly bouncing back.
As suggested during our last report, blanket orders are recommended as the prices will rise through the end of the year.
Taurine
Ample supply has resulted in a soft market. New manufacturers with strong backgrounds have emerged, and some established manufacturers expanded their production line. Prices are historically low, and it’s recommended to lock this price with a blanket order. The current market will gradually increase in the first quarter of 2015.
Sweeteners
Xylitol
The price is stable.
Stevia
This is short in supply due to limited harvest from farmers. It will take one year for the market to rebound. We suggest customers evaluate stock as we predict the price will continue to increase for the rest of the year and into the first half of 2015.
Sucralose
The market is currently stable and low, and profits from manufacturers are slim, a result of over production. Some manufacturers have already ceased production; it’s predicted that 3-5 competitive manufacturers will survive in the long term.
Specialty Ingredients
CoQ10
The price remains stable.
Creatine Monohydrate
Good availability with low, stable pricing.
Caffeine
The starting material costs for caffeine increased in April and May, which led to a shortage and price increase from April to May. The price is now back at normal levels and remains stable.
MSM/Sodium Hyaluronate/Glucosamine
It’s a good time to lock in a blanket order for these ingredients. MSM will remain stable as the supply and market demand is balanced. The current production technology will remain the same. Sodium Hyaluronate will be on a downward trend, as production increased and price competition is fierce. Glucosamine will keep stable due to balanced supply and demand or maybe a little soft.
