CCM: China’s threonine price fluctuates in Q3 2016

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Publish time: 21st September, 2016      Source: CCM
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  In early Sept. 2016, Ningxia EPPEN Biotech Co., Ltd. (Ningxia EPPEN) reduced its sales price of 99% threonine to USD1.8/kg (RMB12/kg), similar to quotations from other leading domestic threonine producers like Meihua Holdings Group Co., Ltd. (Meihua Bio). Prior to this, the domestic market price of threonine averaged USD1.78/kg in Aug.

   

  

  Source: Baidu

  

  In fact, threonine price has stopped rising and started to fluctuate since the beginning of Q3.

   

  Monthly market price of 99% threonine in China, Jan. 2015-Aug. 2016

  

  

  Source: CCM

  

   

  The fluctuation of domestic threonine price in Q3 2016 was attributed to various reasons.

  
- Price rise in July

  
1. Environmental pressure

  

  Several groups of inspectors were assigned by the Ministry of Environmental Protection of the People's Republic of China to 7 provinces / autonomous regions (like Ningxia) for environmental inspection. Meanwhile, it was reported that the current pollution discharge fees will be replaced by environmental protection tax, which may lead to higher production costs.

  
In this context, many threonine producers raised their quotations, and the overall market price was up by 9.09% MoM.

  
2. Production suspension

  

  Domestic threonine manufacturers tend to suspend or reduce production for maintenance in summer, resulting in decreased supply and increased market price.

  

  

  
- Price fall in Sept.

  
1. Producers' price strategy

  

  Many feed enterprises stocked up before the Mid-autumn Festival (mid-Sept.) and National Day (early Oct.). Moreover, as new semester comes, increasing amount of meat is needed in schools, boosting the demand for livestock and further, for threonine, in the short term.

  
Many threonine producers reduced their quotations to boost sales. For instance, Ningxia EPPEN lowered quotations for its amino acids, including threonine, for larger sales.

  
2. Weakening demand

  

  Affected by the high temperature, the domestic number of pigs on farm started to decline in Q3. According to the Ministry of Agriculture of the People's Republic of China, July saw the first falls in the number of both adult sows and live pigs since March:

  

  Adult sows: 37.52 million, down 0.2% MoM and 3.2% YoY

  Live pigs on farm: 375.96 million, down 0.1% MoM and 2.4% YoY

  
This weakened demand for feed, pulling down the threonine price.

  
3. Falling corn price

  

  The corn (raw material for threonine) price continued falling in Q3. According to CCM's price monitoring, the domestic market price of corn averaged USD271.47/t (RMB1,813/t) on 13 Sept., down 19.49% over Sept. 2015. This possibly dragged down the threonine price.

  
Given the continuous interactions of the aforementioned factors, the domestic threonine is predicted to keep fluctuating in the coming period, according to analyst CCM.

   

  Monthly market price of corn in China, Jan. 2014-Aug. 2016

  

  Source: CCM

  

  Notably, China's exports of threonine also increased in July 2016. According to China Customs, the export volume reached 28,900 tonnes, up 22.99% YoY, and totaled 218,500 tonnes from Jan. to July, up 43.75% YoY. The significant growth in exports this year was mainly due to the slack domestic demand for threonine.

   

  China's export volume of threonine, 2012-2015 & Jan.-July 2016

  

  Source: China Customs

   

  This article comes from Amino Acids China E-News 1609, 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.

  

   

  

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  Tag: threonine  amino acids