According to CCM’s price monitoring, the ex-works price of acesulfame-K (ace-K) hit USD7,163/t  in Oct. 2016, up by 29.97% YoY. Regarding the price trend in Jan.-Oct. 2016, the Jan.-April 2016 prices hit historic low since 2014. However, the price kept rising since April 2016 and it rose 36.43% in Aug. compared to than in April.

Ex-works price of acesulfame-K in China, Jan. 2014-Oct. 2016

Source: CCM

Intense supply supports price rise

“The intense supply of ace-K due to production suspension from major ace-K manufacturers in China supported the price rise in April – Aug. 2016,” stated Yang Yimin, editor of Sweeteners China News, CCM.

China’s ace-K market showed large fluctuations since 2015. In Feb. 2015, key manufacturer Suzhou Hope Technology Co., Ltd. (Suzhou Hope, production capacity: 10,000 t/a) was involved in bankruptcy and reorganisation. Though it restarted production in late 2015, its shipments were small.

Suzhou Hope is not alone. In April 2016, another manufacturer of ace-K raw material, Jiangsu Tiancheng Biochemical Products Co., Ltd. (Jiansu Tiancheng), a key diketene (DK) manufacturer (production capacity: 40,000 t/a, 20% of the national figure) suspended production for environmental problem and has yet to resume production so far.

Moreover, in July, an explosion happened to another DK manufacturer Wanglong Group (production capacity: 70,000 t/a), for which to date it has yet to restart production.

According to CCM’s research, the combined DK production capacity of the said 2 companies makes up 70%+ of the national figure, which caused tight supply of DK and supported ace-K price rise.

“Oligarch” pushes up ace-K price

“In fact, seeing the suspension of ace-K related producers, the oligarch ace-K producer, Anhui Jinhe Industrial Co., Ltd. also raised the quotation in order to make more profits,” said Yang.

In April 22, Anhui Jinhe Industrial Co., Ltd. (Anhui Jinhe) raised its ace-K product by USD298.4/t to be part of the price trend.

According to CCM’s research, the current global demand for ace-K is about 15,000-18,000 tonnes, while the production capacity is at about 20,000 t/a. As the largest ace-K manufacturer in the globe, Anhui Jinhe (production capacity: 12,000 t/a) had over 7,000 tonnes delivered in Q1-3 2016, which accounted for around 40% of the total consumption.

Now major ace-K manufacturers in the world are Anhui Jinhe, Suzhou Hope, Beijing Vitasweet Co., Ltd. and Nutrinova (in Germany, production capacity: 3,000 t/a). In regards to production capacity, Anhui Jinhe is over 4 times larger than Nutrinova, showing that an “oligarch” is appearing - Anhui Jinhe of course has a say on pricing.

However, since its competitor Suzhou Hope has not yet withdrawn from the business, Anhui Jinhe, with an intention to capture more shares, will not raise price hastily. Hence, the price will maintain stability in the short run as what the price of ace-K from Aug. to Oct. showed.

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