Driven by the continued decline in prices of major raw materials, the recent price of citric acid is running at a low price. The Shanghai Cooperation Organization Summit to be held in Qingdao may have an impact on the industry and it is recommended to pay attention to the operation in May.
Citric acid is mainly produced by microbial fermentation, and the main raw materials include corn flour, and maltose. Due to the surplus supply of the raw materials, the cost is reduced accordingly.
On April 4, the National Food Trade Center announced the auction time and price for the temporary corn storage. And after that, a large amount of cheap auction grain enter into the market, causing the corn prices to fall. The market price of sulfuric acid, an important ingredient in the citric acid production sector, also dropped by 9.92% in the last three months.
Supply and demand
At present, there is sufficient supply of upstream citric acid production enterprises, mainly citric acid monohydrate. Among the citric acid production enterprises, the COFCO Yushu new production plant is in the commissioning phase, and no finished products are yet on the market. RZBC Group added a new production line and will enter into trial production in May.
The Qingdao summit in June may affect the chemical production in Shandong and its surrounding areas, for the reason that the chemical producers with serious pollution may be subject to shut down and production restriction. At present, domestic citric acid production enterprises are mainly distributed in Shandong, Anhui, and Jiangsu provinces, of which the Shandong has a capacity of 1.14 million tons, accounting for 64% of the national output. If any relevant regulation is issued in Shandong, it will have an important impact on the industry, and may lead to the increase of market price.