While the price of some amino acids remains punishingly high, things should ease up later this year as more capacity comes online in China, according to nutraceutical ingredients importer and supplier DNP International.
In the California-based firm’s latest market update, bosses note that the amino acid market remains very tight due to limited supplies and increased demand from the sports nutrition market.
“DNP sales increased by 39.1% in the first half and amino acids played a very important role in our growth.”
Creatine mono costs up 5-10%
In the case of creatine monohydrate - a staple ingredient in many pre-workout products for fast twitch muscle contraction, “the supply is tight and the cost has increased by 5-10%”, says DNP.
“One of the reasons for its shortage is because of the raw materials in North China, and one of the major producers decreased the export to US in the past few months.
“The major raw material manufacturer is under equipment maintenance till the end of the year and the shortage will continue for the next three to four months.”
Carnitine is currently hot in the market…
Demand for L-Carnitine is also strong, particularly in North America, it adds.“Carnitine is currently hot in the market. One of the major manufacturers is relocating their facility and one of the major facilities had an accidental explosion. This has made the supply of Carnitine very tight.”
MSM: Availability will be better in the second half…
MSM (Methylsulfonylmethane), is also “very hot in the market due to the shortage of the starting material”, says DNP.
However, availability should improve in the second half of the year: “We learned that some of the manufacturers have resumed production. [But] the price will stay high for some time due to the limited output.”
L-Leucine: The market price is at a historical high
Similarly, while arginine prices remain high, production capacity has increased following the relocation of a major manufacturer, it says, meaning prices should ease later this year.
The same applies to L-Leucine, the price of which is currently at a “historical high”, says the firm.
As for L-Isoleucine and L-Valine: “Some manufacturers will resume production in the second half of the year and expand production capacity. We predict availability will be better and prices will be stable.”
And sports nutrition staple L-Glutamine? “The price remains high for now in China. But we have learned that new capacity has already launched and an existing manufacturer is expanding its production line.”
Ascorbic acid: Overcapacity keeping prices low
By contrast, Chinese vitamin producers have had the opposite problem, it says: “In the first half of 2012, it was a tough time for vitamin manufacturers due to slow demand and overcapacity.
“Most vitamins are decreasing now due to soft demand, including Thiamine Mononitrate/HCL, Folic acid, Vitamin E synthetic, and Pyridoxine HCL. The few vitamins that are increasing include Riboflavin, Niacinamide, and B12.”
As for ascorbic acid (vitamin C), the market is “still at a historical low level and this will last for quite some time until the industry is reorganized and the supply and demand is rebalanced”, claims the firm.
“The overcapacity scenario will continue until some factories are dissolved, however, right now the manufacturers are still trying to survive.
“There might be a small fluctuation due to a production shut down during the summer, but it is difficult to see any big change in the near future.”
Sucralose: ‘One of the hottest products in the ingredient market’
Finally, sucralose supplies from China continue to struggle to keep pace with demand, it says.
“Sucralose is one of the hottest products in the ingredient market. Inquiries and orders come in great numbers. This increase is due to the supply issue with one of the major producers in China and also the increasing demand worldwide for low calorie sweeteners as a healthier food choice.
“Some of the factories are expanding production capacity, but we are expecting this will take place in the next two to three months and the trend will stay high toward end of the year.”
Volatility and uncertainty will continue to influence our markets
Chief operating officer Jim Schultz said: "We expect that volatility and uncertainty will continue to influence our markets. Therefore, we will continue to adapt our structures and processes so that we can respond more quickly and flexibly than our competitors.”
Many of DNP's customers have now switched from spot purchasing to its three-month 'short blanket contracts' in order to increase their buying power and lower their risk, he said.