Amino Acids China E-News 1601(12 issues per year)

Date: 2016-02

“In 2015, a slowdown in Chinese economic growth, serious overcapacity, low prices, increasing burden from environmental protection and product homogenization hinder the development of amino acid enterprises. They struggle for development and make sweeping transformation and reform, in order to remain competitive and profitable in the overall industry.

In 201 5, the domestic lysine market was in a malaise, mainly because of oversupply. Even though mainstream manufacturers attempted to raise prices by reducing production, the effect was minimal and short-lived. It’s estimated that the 201 6 lysine market will be a continuation of the market downturn experienced in 201 5.

Due to the intensive production, massive imported meats and strengthened industry supervision, large amount of small feed manufacturers withdrew from the market, so the total number of Chinese feed manufacturers is decreasing year by year.

In Jan. 201 6, Meihua Bio signed a restructuring framework agreement with CJ Group. This is another restructuring move from Meihua Bio following its plan to acquire EPPEN Biotech. If successfully, the supply situation of the global amino acid market would be transformed.

At the end of Dec. 201 5, Sichuan Hebang began to construct a 1 00,000 t/a methionine project. It’s scheduled for completion and should be put into production by the middle of 201 6. This move will be helpful in extending the company’s industrial chain, improving its operational capacity as well as increasing its ability to combat risk. It will also break the monopoly of foreign methionine companies in the Chinese methionine market.

In Jan. 201 6, Star Lake Bioscience released a pre-announcement of their annual performance in 201 5. It’s anticipated that in 201 5, the company made losses for the second consecutive year and, in doing so, will be faced with the risk of Special Treatment. In the meantime, we predict that the company will have the opportunity to make profits going forward.

On 1 4 Jan., COFCO Bio-chemical announced the relocation plan on its production lines of amino acid, citric acid and fuel ethanol.

In Jan. 201 6, domestic methionine price stops falling, mainly because of increasing imports cost caused by RMB devaluation and downstream feed enterprises stocking up with methionine. It’s estimated that methionine price will maintain stable or slight fluctuate in Q1 .

In Q4 201 5, the domestic price of threonine remained low and stable, affected by expanding capacity, declining raw material prices and the slowly recovering farming industry.

Between Jan. and Nov. 201 5, China’s export volume of glutamic acid fell, which was a continuation of export declines experienced in 201 4. Despite this, some manufacturers still performed relatively well. During this period, Thailand replaced Vietnam as the largest export destination of Chinese produced glutamic acid.”


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