Amino Acids China E-News 1607

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Nov 03, 2016, 03:54 ET

NEW YORK, Nov. 3, 2016 /PRNewswire/ -- July 2016 sees rises and falls in the market prices of major amino acids in China for various reasons.

In particular, the price of lysine soars due to tight market supply. Meanwhile, some domestic threonine producers raised their quotations, affected by the environmental inspections this month. On the contrary, frequent floods reduce downstream demand for methionine and therefore, the market price of methionine falls slightly over last month.

Thanks to the rises in the market prices, some amino acids improved their profitability. For instance, Yongan Pharmaceutical announced a large rise in its H1 2016 net profit, mainly due to the growth of both the sales volume and price of its taurine products. The leading taurine manufacturer may continue to raise prices in order to boost profits. In recent years, the company has expanded into the food and health care product industries.

Yet, there are some amino acid enterprises facing great challenges. Star Lake Bioscience predicted to continue suffering losses in its H1 2016 financial pre-announcement and may delist if the losses continue in H2. Its API businesses which are of high gross profit margin may be its way out.

Domestic market of amino acid derivatives develops stably. On 5 July, Zhenyuan Pharm announced its plan to expand SAM production capacity in the coming period. At present, there are only two domestic enterprises approved to sell SAM for injection. Given the large demand, the SAM market is promising.On 5 July, 2016, Zhenyuan Pharm announced its plan to expand SAM production capacity in the coming period. At present, there are merely two enterprises allowed to sell SAM for injection. However, given the large domestic demand, more pharmaceutical manufacturers have started to apply for production approval. So far, the Chinese SAM market has been in stable development.

On 1 July, 2016, the 2016 Exchange Meeting on Key Production Technologies for Non-cereal Biomass Polyamine & Polyamino Acids was held in Hohhot City, Inner Mongolia Autonomous Region. At the conference, experts disclosed that the optimization of polyglutamic acid fermentation technique has been completed already.

New Hope Liuhe plans to acquire Besun Agricultural to expand its live pig farming business into Northwest China. Given the fact that China's pig farming industry is enjoying increasing levels of profit, most leading feed enterprises have launched swine breeding projects, with the practice predicted to become more common in the near future. Expansion of the pig breeding industry can facilitate national control on the number of pigs available for slaughter and consequently reduce the negative impact of the "economic circle of pigs".

Yongan Pharmaceutical announced a large rise in its H1 2016 net profit, mainly due to the growth of both the sales volume and price of its taurine products. The leading taurine manufacturer may continue to raise prices in order to boost profits. In recent years, the company has expanded into the food and health care product industries.

Inner Mongolia Fufeng's two key techniques, "Amino Acid Extraction through Secondary Ultracentrifugation Degerming-Concentration-Continuous Ionization Treatment" and "Technique for Treating Fume Produced by Amino Acid Production Process", were authenticated to be "International Initiation" and "International Leading" respectively. As national environmental requirements get stricter, enterprises should invest more into research on environmentally-friendly production technologies to recycle effluent and exhaust in the production process and to reduce reosurce loss and pollutant discharge, which will make them more competitive in the market.

Star Lake Bioscience predicted to continue suffering losses in its H1 2016 financial pre-announcement. Given the fact that it has been in deficit for two consecutive years, the company is confronted with the risk of delisting. Fortunately, its API businesses which are of high gross profit margin may be its way out.
China's supply of lysine gets tight due to reduction in production, resulting in the soaring market price in early July 2016. Given the dramatic increase, downstream purchasers hesitate and hold a "wait-and-see" attitude, which to some extent affects the price surge. CCM predicts the market price of lysine to stay high in the short term.

In July 2016, groups of inspectors were assigned by the SEPA to 7 provinces / autonomous regions (like Ningxia) for environmental inspection. Affected by this, Ningxia EPPEN may cut down its output of threonine and some domestic threonine producers raised their quotations. The market price of threonine shows a MoM increase of 9.09% this month. Analyst CCM predicts that this upward trend may continue in Q3.
In July 2016, frequent floods reduce downstream demand for methionine. Therefore, China's market price of methionine falls slightly over last month. As more new methionine projects are put into operation, the price is likely to continue declining in the near future.

China's MSG export price hit a new record low in May 2016 over the past 6 years, due to the declining export volume, intensified competition and decreasing corn price. At present, MSG is mainly exported to developing countries in Asia. Additionally, the monopoly in domestic MSG market may facilitate the price to be raised jointly, but it is less likely to happen because of the decreases in corn price and export volume.
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