CCM: G20 Summit probably to cause short-run supply shortage of vitamins in China 07-20-2016  1246

The G20 Summit is to be held on 4 Sept., 2016 in Hangzhou City, Zhejiang Province. To make the air quality meet standards during the conference, government will impose stricter environmental regulations on chemical enterprises (especially the small- and mid-sized ones) in Hangzhou and the surrounding areas.


Source: Bing


So far, environmental regulations have been carried out based on 3 zones: summit venues with a 50 km, 100 km and 300 km radius respectively, for "crucial", "strict" and "general" control.




This has posed great negative effects on vitamin, viscose and dyeing industries. Small-scale producers and intermediate suppliers have started to suspend production this month, and leading producers will do so by Aug, lasting 1-2 months. This is likely to tighten the supply and push up corresponding market prices in the short run.


Early in May, the Zhejiang government issued the Work Plan for Environmental Quality Assurance during the 2016 G20 Summit:

  • Rectification (before 23 Aug.): to further strengthen the prevention and control of environmental pollution and make well preparations for the G20 Summit
  • Quality assurance (24 Aug.-6 Sept.): protective measures to be fully taken and the period specified for production suspension is from 26 Aug. to 6 Sept.


Given dispersibility of air pollution, besides Zhejiang Province, enterprises in the rest of Yangtze River Delta region (covering Zhejiang, Jiangsu, Anhui, Jiangxi provinces and Shanghai) and the surrounding are also required to suspend or cut down production. 

 

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  Shanghai: 225 producers to suspend production before the summit


It is reported that the 255 enterprises in printing, chemical, building material and pharmaceutical industries, located around 200 kilometres away from Hangzhou, are asked to suspend production between 26 Aug. and 6 Sept., without any governmental subsidies. Jinshan and Fengxian districts will be regarded as key controlling areas.


Shandong Province: 9 cities to suspend or cut down production


So far, involved enterprises in Ji'nan, Qiangdao, Zibo, Weifang, Ji'ning, Rizhao, Laiwu, Linyi and Liaocheng cities have been listed and put on file in local environmental protection departments.


Jiangxi Province: to suspend or cut down production for 20 days


According to the Jiangxi Province's Work Scheme for Regional Collaboration on Air Quality Assurance during the 2016 G20 Summit, plants in Nanchang and Jingde cities should suspend or cut down production from 23 Aug. to 7 Sept.


Selected vitamin producers near Hangzhou City


Note: Yifan Xinfu stands for Yifan Xinfu Pharmaceutical Co., Ltd.;

     Zhejiang NHU stands for Zhejiang NHU Co., Ltd.;

     Zhejiang Medicine stands for Zhejiang Medicine Co., Ltd.;

     Garden Biochemical stands for Zhejiang Garden Biochemical High-tech Stock Co., Ltd.;

     Zhejiang Tianxin stands for Zhejiang Tianxin Pharmaceutical Co., Ltd.

Source: CCM

 

During the 2016 G20 Summit, a number of vitamin producers surrounding the venues are required to suspend production for varied periods. For instance, 

  • About 13-15 weeks: Zhejiang NHU Co., Ltd. (a domestic leading vitamin producer)'s vitamin A production to be halted from July to the end of the summit
  • About 4 weeks: Zhejiang Medicine Co., Ltd.
  • At least 2 weeks: Yifan Xinfu Pharmaceutical Co., Ltd., Zhejiang Tianxin Pharmaceutical Co., Ltd. and Zhejiang Garden Biochemical High-tech Stock Co., Ltd.


"At present, heavy environmental pressure has led to the short supply of active pharmaceutical ingredients (APIs). Meanwhile, the on-going supply-side reform and low market price has helped knock out more small-sized enterprises. As a result, supply of vitamins gets tighter," commented an industry insider.


In the short term, vitamin API producers located around Hangzhou will have to cut down production during the 2016 G20 Summit, which may exacerbate the short supply and further, push up market prices of vitamins. Specifically, prices of vitamin B5 (calcium pantothenate), B6, B1 and A are very likely to continue rising, and vitamin D3 and B7 (biotin) also have potential to go up.


 

This article comes from Vitamins China E-News 1607, CCM




 

About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.

 

For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.

 

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