Source: Baidu

Then domestic sources questioned about the cause of production suspension, by citing the Written Decision about Administrative Punishment made by the Environmental Protection Bureau of Sheyang County also on 10 Aug. They believed that it was this suit that resulted in the production suspension.

On 2 Sept., LMZ responded to this questioning, saying that it was the same project but 2 issues. The receipt on 10 Aug. was a fine of USD59,890 (RMB400,000) on its not submitting EIA documents for its 800 t/a sucralose project. In this case, JK Sucralose was also ordered to suspend production for rectification, but only in regards to this 800 t/a production line.
So far the suspension & rectification timetable has not yet been unveiled. However, LMZ predicted no resumption this year.

Since JK Sucralose is the 1st largest sucralose manufacturer in China and the 2nd largest in the world (capacity: 2,000 t/a), its full suspension will inevitably intensify the already short supply and further drive up price in the market.

According to CCM’s research, many sucralose manufacturers have already run out of stocks.

• Changzhou Niutang Chemical Plant Co., Ltd.: in severely short supply, price quoted at USD82,355/t (RMB550,000/t). “Our production capacity hits 40-50 t/d. Impacted by the environmental policies and the G20 Summit, we only hope to work at full capacity, but have no plans to expand production during JK Sucralose’s suspension.”

• Ji'an New Trend Technology Co., Ltd.: no stocks for a certain period, unable to have quotations. “The production capacity reaches 1,500 t/a now. The sucralose has been in short supply since May, and the production based on orders will last till the end this year,” is a claim by the company

• Guangdong L&P Food Ingredient Co., Ltd.: tight supply, unable to quote price. “Now the quotation in the market is at around USD89,842/t (RMB600,000/t),” said the company, “Our production capacity is 500-600 t/a.” In reality, it ever stated to CCM that it has intention to expand production

“Since we have suspended production for maintenance, we have no supplies or quotations,” said a manager from JK Sucralose.

Currently, the domestic sucralose manufacturers are mainly pressured by stricter environmental policies. During the production, it is very easy to generate wastewater, for which large amount of capital and equipment should be input to standardise the emissions. “We have invested a cumulative sum of over USD8.98 million (RMB60 million) in coping with pollutants from the production,” disclosed a manager from JK Sucralose also, “This is a key restriction on working at full capacity.”

According to CCM’s research, the ex-works price of sucralose went up sharply to USD61,930/t (RMB400,000/t) in May, up by 42.94% YoY and 56.24% MoM, and maintained at over USD74,868/t (RMB500,000/t) in June-Aug. It is expected that the price will go up continuously in the following months.

In this context, more and more companies will step into this business. In reality, Anhui Jinhe Industrial Co., Ltd. has put its 500 t/a sucralose project into operation since April this year, which worked at nearly full capacity in June. It plans to advance its 1,500 t/a project in H2. Probably, some companies will grasp market shares during JK Sucralose’s suspension by increasing production and even expanding production capacity.

Ex-works price of sucralose in China, Jan. 2015-Aug. 2016

Source: CCM

This article comes from Sweeteners China News 1609, CCM

About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.

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Tag: sucralose  sweeteners

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