Rock bottom raw material prices unlikely to last, DNP says

Historically high prices in early 2012 led to overcapacity in many raw material sectors, the company said.  As a result, demand fell and prices declined in lockstep.  The market is still in soft rebound from this situation, and DNP said it expects that, broadly speaking, prices will remain relatively stable through the first quarter.

Some prices already increasing​

CoQ10 is one of the ingredients whose price is already going back up.  Japanese supplier Mitsubishi will stop production in March, and partly in response, competitor Kaneka announced a 10% price increase in xxx.  Another development in the sector concerned the dismissal of Kaneka’s patent infringement lawsuit against Chinese manufacturer ZMC.

“The price increased slightly due to changes in the exchange rate, raw materials and labor costs,”​ DNP said.

Other ingredients whose prices are going up included creatine monohydrate, L-leucine and L-tyrosine.  In the case of creatine, the  major supplier will suspend production starting in May for two months for annual plant maintenance, meaning in the short term supply will be constricted.  Supply in China was also limited for the two amino acids, sending prices on the way up.

Stuck in neutral​

Among the ingredients whose prices are still locked in the “rock bottom” scenario are L-arginine, L-glutamine and L-isoleucine.  In the case of this last ingredient, DNP said, prices are hovering close to the manufacturer’s cost and are unlikely to go lower.  In the case of L-arginine alphaketoglutarate (AAKG) prices did in fact go so low that most manufacturers stopped producing the ingredient, DNP said.

Lutein headed down​

A couple of ingredients experienced significant bumps in supply which will be reflected in lower prices, DNP said, lutein among them.  The July-to-November harvest period for marigold flowers, the raw material for lutein, was larger than normal, unlike some other years when this ingredients has been in short supply. 

“There will be a huge drop in price for lutein powder, due to the good harvest of marigold this season,”​ DNP said.

As for the old nutracuetical standby, ascorbic acid, “supply far exceeds demand.  There is no sign of change in the market,” ​DNP said.

Sucralose is another ingredient that is in a rebalancing phase, which has worked to keep prices low.

“The demand was high within the last three seasons. As a result, most manufactures expanded their production. Recently, the demand has decreased, which caused the price to drop.  In the long run, the consumption of this product will continue to increase,”​ DNP said.