The "price surge" of vitamins continues: traders "cannot get supplies," large customer orders from manufacturers are also following market trends, and market outlooks are diverging | Fax

AI Question: Why are vitamin manufacturers tightening their supply strategies right now?

China Finance Network (Cailian She) March 25日讯 (Reporter Luo Yichen) Recently, affected by the situation in the Middle East, prices of various chemical raw materials have risen. Coupled with domestic manufacturers tightening supply one after another, prices of vitamins and amino-acid-related products have continued to climb, drawing significant market attention.

At present, what exactly is the supply and demand situation for vitamins and amino acids? With prices continuing to rise, how do different links along the industry chain—listed companies, traders, and others—fare in terms of earnings? How do industry insiders judge the subsequent price trend? With these questions in mind, a Cailian She reporter interviewed multiple listed companies and traders recently.

“Vitamin manufacturers aren’t shipping now. For popular products like vitamin A and vitamin E, we sell a little less and less.” Traders in Shandong, Hunan, and Hubei all told a Cailian She reporter that with this wave of vitamin and amino-acid price increases continuing, the supply side has already tightened significantly. The companies they work for are positioned in the middle of the industry—linking upstream producers and downstream feed companies—so they are the most sensitive to changes on both ends of industry supply and demand.

A Cailian She reporter learned that after this round of price increases, both upstream producers and traders along the chain have benefited to varying degrees. Looking ahead, industry expectations are diverging. One camp believes that losses in the end-stage livestock industry will make it difficult to support continued price increases. The other camp holds a more optimistic view, arguing that the supply-side difficulties this round go beyond 2024 and will be favorable for prices to keep climbing.

Traders: Inventory appreciation, with no obvious change in sales volume

This round of vitamin and amino-acid price increases began at the end of February and has continued for nearly a month. Prices of various vitamin and amino-acid products have all risen to different degrees. Only a few products such as vitamin D3 have seen relatively smaller price increases, and the industry has gradually moved out of last year’s Q4 low point.

iFind data shows that on March 24, the spot quotation for vitamin E was 92.5 yuan/kg, with a cumulative increase of 10.12% over the past week. The spot quotation for vitamin D3 was 132.5 yuan/kg, with no change over the past week and a cumulative increase of 1.92% over the past month.

On March 25, the spot quotation for vitamin A was 109.29 yuan/kg, with a cumulative increase of 24.60% over the past week. The spot quotation for imported methionine (99%, L-type) was 50.25 yuan/kg, with a cumulative increase of 47.79% over the past week. The spot quotation for domestic methionine (99%) was 49 yuan/kg, with a cumulative increase of 49.62% over the past week.

“Right now, for the overall market, the price increases should all be a good thing. For middlemen and traders, they can make a bit more; for upstream factories, they also get more profit.” A trader surnamed Fu from Hunan said. In the aftermath of this round of price increases, traders’ inventory has already appreciated.

Taking methionine as an example, Mr. Geng from a Shandong-based trader specializing in amino-acid trading told a Cailian She reporter directly that most traders’ spot costs are roughly around 20 yuan/kg. By mid-March, market prices had already risen to above 30 yuan/kg, and inventory gross margins have increased significantly on a quarter-over-quarter basis.

“Everyone is competing on inventory now,” Mr. Fu admitted. Because most domestic vitamin manufacturers have basically stopped shipping, traders have also slowed their shipping pace. “I’m not sure which vitamin varieties are relatively tight. There’s actually still some supply in the market (referring to traders still selling goods), but when prices are clearly rising like this, people definitely won’t dump all the goods they have at once. So it’s not that there’s no goods—it’s that the release pace is slower.”

Compared with upstream manufacturers, middle-stream traders have more flexibility in their shipping pace. Several traders told a Cailian She reporter, “If I can make double the profit, why wouldn’t I sell it? What if I hold it and prices fall? We’re not the same as those who trade futures. Spot goods have shelf lives, so you can’t just keep holding them. And downstream customers can’t not do business either—you have to ensure ongoing, stable supply.” Mr. Geng said. He added that for the product he mainly trades—methionine—its price broke 40 yuan/kg last week. The company chose to clear out all inventory and shift toward vitamin products with lower risk.

But in terms of sales volume, multiple traders interviewed said, “There’s no obvious year-on-year change; compared with last year’s Q4, it’s definitely better quarter-on-quarter.” A Shanghai Steelhome analyst also said that in this year’s first quarter, overall amino-acid demand was better than the same period last year. Vitamins showed no obvious change—basically maintaining just-need replenishment.

Manufacturers “hoarding stock”? Listed companies: Adjust shipping quantities based on market conditions

“Vitamin goods can’t be obtained now.” Regarding rumors that supply is tightening and that manufacturers are “hoarding stock,” multiple traders confirmed to a Cailian She reporter that starting in early March, the supply of vitamins and amino acids tightened significantly. Overseas manufacturers mostly paused supply citing force majeure. Domestic manufacturers also repeatedly stopped quotation and stopped signing. Middle-stream traders are already “unable to obtain inventory.”

In traders’ view, “hoarding stock” is more of a market strategy manufacturers adopt to achieve higher profits. “As far as I understand, this month Xinhecheng (002001.SZ) released 6,000 tons of methionine, but the solid methionine (monthly) capacity already built by the company should be more than 30k tons. People think the manufacturer (tightening supply) wants to test downstream tolerance for the new price.” Mr. Geng told a Cailian She reporter.

Traders’ speculation is not without basis. On March 19, a Cailian She reporter called the securities departments of companies including Adisseo (600299.SH) in the capacity of an investor. The staff from Adisseo said the company’s raw material supply is stable and production and operations are normal. At present, the methionine price increase is enough to cover raw material costs. As for the issue of tight methionine supply in the domestic market, the relevant person in charge did not give a direct response, only saying that the company’s sales are normal.

A Zhejiang Pharmaceutical (600216.SH) securities-department representative, similarly contacted by a Cailian She reporter in the capacity of an investor, also said that as the industry’s overall outlook continues to improve, whether supplying more is considered from a market-strategy perspective, and that downstream demand is currently good.

Some industry analysts also told a Cailian She reporter that the industry itself is operating at historically low price levels, so companies’ willingness to “control production and support prices” is strengthening. Downstream feed industry sensitivity to additive prices like vitamins and amino acids is relatively low (additive costs account for only 1%-3%). Price increases are thus transmitted smoothly, which also provides space for manufacturers’ “control production and support prices.”

The China Council for Industrial Research (CISDI) predicts that in 2025, China’s vitamin output is expected to reach 480k tons, accounting for about 84% of global total production. China has become the core vitamin-producing country globally, with its capacity scale continuing to lead.

In terms of listed companies’ production capacity, Xinhecheng is a global dual leader in vitamin A and vitamin E. It has annual vitamin A capacity of 8,000 tons (calculated as 500k IU) and annual vitamin E capacity of 60k tons (calculated as 50% powder). Zhejiang Pharmaceutical’s synthetic vitamin E annual capacity is 25k tons; its natural vitamin E output is ranked first globally; and its annual vitamin A capacity is 5,000 tons. Garden Biotech (300401.SZ), a leading manufacturer of global vitamin D3, has capacity of 3,000 tons.

For amino acids, China occupies a dominant position in the global amino-acid market, with high capacity concentration. The top four companies’ market share exceeds 80%. Among them, the world’s largest amino-acid producer, Meihua Biotechnology (600873.SH), has lysine capacity of 30k tons, accounting for 81.6% of global share. Xinhecheng has 550k tons of methionine capacity and other amino-acid capacities. Adisseo currently has total methionine capacity of 3.5 million tons per year, and another 1.5 million tons per year solid methionine project is under construction, expected to begin operations in 2027.‌

Listed companies: Big-customer orders priced in line with the market

With vitamin prices rising, for listed companies that generally sell directly, can the order prices from major customers follow the market行情 to rise as well? Can the extent of product price increases cover the rise in costs? Does the situation in the Middle East affect listed companies’ import of raw materials and export of products?

In response, a Cailian She reporter called Zhejiang Pharmaceutical as an investor. The staff in its securities department said, “For direct-sale customers, we can choose not to supply. Since vitamin prices have been trending higher continuously, if the order prices signed earlier were relatively low, then during this period we may not sign new ones. Now that the market is doing better, the situation is different.”

Regarding raw material imports and product exports, because the Strait of Hormuz lies in the Middle East and is a key route for the global energy supply chain, but it is not a route to Europe, it currently does not affect vitamin and amino-acid manufacturers’ raw material imports and product exports. Multiple listed companies said their production and operations are normal.

A relevant person in charge at Adisseo told the Cailian She reporter that at this stage, the extent of the methionine price increase is sufficient to cover costs, and the company’s production and operations are normal.

Because there are many types of products related to vitamins and amino acids, and the price increases vary, it’s difficult to specifically calculate a listed company’s earnings. But if calculated based on capacity and the latest current prices—for example, for Xinhecheng—based on March data, the company’s vitamin E sales revenue is expected to increase nearly 60% quarter-on-quarter; vitamin A sales revenue is expected to increase by more than 60% quarter-on-quarter; and methionine sales revenue is expected to rise to nearly 1.7 times (assuming prices of the 99% purity variety).

There is no doubt that companies with advantages across the entire industry chain and better cost control will see better returns in this round of price increases.

As for gross margin of listed companies: in the first half of 2025, Xinhecheng’s nutrition products (covering vitamin-type, amino-acid-type, and pigment-type products, etc.) had a gross margin of 47.79%. Zhejiang Pharmaceutical’s life nutrition products (covering vitamin-type and vitamin-like products) had a gross margin of 54.95%. Meihua Biotechnology’s animal nutrition amino-acids had a gross margin of 19.65%, and its human medical amino-acids had a gross margin of 25.68%. Adisseo’s functional products (including methionine and feed-grade vitamins) had a gross margin of 24.53%. Due to advantages across the entire industry chain, Garden Biotech’s vitamin products’ gross margin is as high as 62.99%；

Downstream feed industry demand is insufficient, and industry expectations for the outlook diverge

For the outlook, industry views are currently divided into two camps. One is pessimistic: it believes that persistent weakness in the livestock industry, combined with an acceleration in the pace of reducing pig production capacity, will lead to a decline in feed demand for vitamins and amino acids, making it difficult to sustain this round of price increases.

“What we’re worried about is that downstream demand is too poor. Livestock farmers are losing money, and feed mills aren’t making money either. I understand that some smaller feed mills simply stop producing feed and sell raw materials directly. Because raw material prices are rising now, selling raw materials gives you cash. If you sell feed to livestock farmers, you’ll still have (accounts receivable/payment) delays.” said Yang, a trader from Shaanxi, to a Cailian She reporter.

Public information shows that downstream demand for vitamins and amino acids mainly comes from three major fields: feed, pharmaceuticals and cosmetics, and food and beverage. Among these, feed is the most important source of demand for vitamins. In particular, for fat-soluble vitamins such as vitamin A, vitamin D3, and vitamin E, the demand share exceeds 60%. Vitamin A accounts for as much as 84% of its applications in feed. In the pharmaceutical and cosmetics sector, demand for vitamins has grown steadily in recent years, especially for natural vitamin E and vitamin C, whose applications in health products and skincare products have become increasingly widespread. In the food and beverage industry, vitamin C is the main component, mainly used for functional drinks and fortified foods, and vitamin C accounts for about 51% of downstream demand in the food sector.

The optimistic camp believes that compared with the 2024 price wave that was also triggered by overseas supply, this round’s supply situation may be more complex, and prices may remain high or trend upward with fluctuations. “In 2024, a foreign manufacturer had an accident. After supply recovered, vitamin prices quickly fell. This time, it’s influenced by a major international macro event. When it ends and when overseas capacity can resume are both uncertain. Also, in 2024 it was only overseas supply that had problems, while domestic supply was normal. This time, domestic supply is also tightened significantly.” said Xi Linyun, a vitamin analyst at Longzhong Information.

Other analysts also told a Cailian She reporter that this round of price increases is even more complex. On the one hand, about 70% of global vitamin A/E production capacity is concentrated in Europe. As the Middle East situation escalates and the Strait of Hormuz closes, the supply chain faces severe disruptions, affecting normal operations of Europe’s major vitamin production bases. Major players such as BASF and DSM reduce output or even suspend production due to reliance on natural gas and factory maintenance. This forms a periodical supply shortfall. On the other hand, under the influence of the Middle East situation, crude oil prices surged sharply, driving a blowout in the prices of vitamin raw materials and intermediates. Additionally, downstream traders’ inventories are at low levels, and with expectations of price increases, their willingness to replenish concentrates is relatively high. Combined with traders hoarding behavior, this further exacerbates market tightness.‌

（Cailian She reporter Luo Yichen）