Summary: Considering the current market
conditions and dynamics, NB Group suspended VB2 production to turn to threonine
production.
On 5 May, 2015, Shandong NB Group Co., Ltd.
(NB Group) decided to suspend VB2 production line starting from that day and
transferred to threonine production.
The production adjustment can be attributed
to two reasons:
For one thing, incremental environment
protection cost and decreasing supply of threonine. This drove up the market
price of threonine. Its price presented a YoY growth in each single month from
Jan. to April 2015, price increased by 42% in April from the same period a year
earlier to reach USD2,442/t.
At present, threonine manufacturers have
handsome profit. The company stated a substantial increase in sales orders from
domestic and overseas customers, and it was busy with orders in Q2 and started
to receive orders for Q3. Its threonine capacity is about 40,000 t/a, and the
factory is working at full capacity. Therefore, the company is urgent to
increase capacity in a short time.
For another, price downtrend of VB2.
According to CCM's investigation, the domestic market price of 80% feed grade
VB2 was USD20,851/t in April, down by 25% over Jan. this year; and that of 98%
food grade VB2 was USD50,547/t, down by 10% over Jan. The company transferred a
1,200 t/a VB2 production line into threonine production line.
This move will not only raise the output of
threonine to achieve more profits, but also may ease the price downtrend of VB2
in the future by reducing the supply. On 5 May, NB Group raised export price by
15%. On that day, the FOB Qingdao Port price of feed grade VB2 (granule) was
USD20/kg, and that of feed grade VB2 (powder) was USD19.2/kg.
NB group is mainly engaged in the
production of choline chloride, VB2 and threonine. Among them, choline chloride
is a star product of the company, with the capacity of 200,000 t/a. Since May
2006, it has invested USD98 million (RMB600 million) in the construction of VB2
and threonine, which were exported to over 70 countries and regions, such as
Europe and the US, Africa.
Market price of threonine in China, Jan.
2014-April 2015
Source: CCM
Market price of VB2 in China, Jan.-April 2015
Source: CCM
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