Most of Lysine Manufacturers reduced production owning to Sufficient Stock, Weak Demand and Summer Plant Maintenance.

Date: 2015-08-10

“On 9 July, 2015, the SAIC issued the exposure drafts of drugs and health care, which belong to the new Advertisement Law. The strict new rules may promote the transformation of marketing mode in health-care and pharmaceutical industries, regulate the competition between enterprises and safeguard the legal rights and interests of consumers.

In July 205, most of lysine manufacturers, such as EPPEN Biotech, Tongliao Meihua and CJ Liaocheng, reduced production, owning to sufficient stock, weak demand and summer plant maintenance.

In H1 2015, the total output of domestic feed dropped because downstream breeding industry was in downturn and the demand for feed was weak. Specifically, the output of pig feed and poultry feed decreased dramatically.

Bluestar New Chemical will swap assets with Bluestar Group. After that, Bluestar New Chemical will hold 85% of equities in Bluestar Adisseo and then plans to turn its main business to methionine and vitamin A.

In H1 2015, Meihua Bio recorded rise in net profit, which was supported by the rising sales of MSG, threonine and lysine.

Fufeng Group’s 100,000t/a threonine project and 200,000t/a MSG project are predicted to put into production in 2016. At that time, Fufeng Group will have the world’s largest amino acid fermentation base.
Market prices of major amino acids in China, July 2015
In July 2015, the market price of methionine continued to drop because of weak demand for downstream market and increasing supply.
In July 2015, the market price of domestic threonine continued to fall, because the demand of it was weak while its supply continued to rise. The price of threonine may keep stable or even rebound as the manufacturers reduced their production.
Imp. & Exp. overview of some amino acids in China, June 2015
In May 201 5, China’s export volume of lysine ester and salt fell month on month, but, the exports to the Russian Federation, the Netherlands and Germany all increased month on month.
In May 2015, China’s import volume of methionine declined significantly month on month. Of this, the imports from the US dropped obviously.

According to data from the National Bureau of Statistics (NBS), the preliminary accounting GDP reached USD4.85 trillion (RMB29.69 trillion) in the first half of 2015, with a 7.0% year-on-year growth rate. Specifically,

Data from NBS showed that China economy is recovering stably.
Amino acid market performed unsatisfactorily in China. Lysine manufacturers reduce production in summer, owning to sufficient stock and weak demand. The total export value of China’s lysine ester and salt declined in the first half of 2015, because the demand from downstream industries, especially feed industry, was weak.

In H2 2015, the policy support and enterprises’ asset reorganization will be favorable for the amino acid industry development.

The introduction of the new Advertising Law and the Standards for the Examination and Publication of Drug Advertisements (Exposure draft) will ensure the quality of amino acids.

Asset reorganization between Bluestar New Chemical and Bluestar Group and the new production lines of Fufeng Group to be put into production will guarantee the output of amino acids.

The USD/RMB exchange rate in this issue is USD1.00=RMB6.1149 on 1 July, 2015, sourced from the People’s Bank of China. All the prices mentioned in this report will include the VAT unless otherwise specified.”


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