Chemical industry giant delivery affected by force majeure, Vitamin A and Vitamin E prices are expected to rise further
The vitamin sector has recently seen frequent fluctuations. German chemical giant BASF stated that due to a factory fire causing production stoppage, prices of Vitamin A and Vitamin E are expected to further rise. Guojin Securities research report pointed out that short-term supply contraction will drive up prices of Vitamin E products, and the profitability of related companies will also improve. Pacific Securities believes that the explosion at the BASF factory and the closure of the DSM Switzerland factory have led to supply shortages, and prices of Vitamin A and Vitamin E are expected to continue to rise. It is recommended to pay attention to companies such as Xinhecheng and Andesun
The vitamin sector has recently experienced frequent fluctuations. German chemical giant BASF announced that its Ludwigshafen plant stopped production due to a fire on July 29, leading to force majeure in the delivery of some vitamin A, vitamin E, carotenoids, and aromatic component products. As of August 7, 2024, Boya and Xun data shows that the market price of vitamin E is 142.5 yuan/kg, with a daily increase of 1.8%. Compared to the end of July, the price has increased by 49.2%, and compared to the beginning of the year, the increase is 139.5%.
Guojin Securities research report points out that with strong support from the overall industry supply and demand fundamentals, the expected short-term supply contraction is likely to drive further price increases for vitamin E products. Companies with vitamin E production capacity are expected to see improved product revenue and profitability, further boosting overall performance. It is recommended to focus on Xinhecheng, Zhejiang Medicine, and Nengte Technology, which have vitamin E production capacity.
Pacific Securities analysis indicates that due to the relatively concentrated supply of vitamin A intermediate citral, and BASF holding a significant share, the price increase of vitamin A is most pronounced due to this force majeure. As the demand volume for vitamin E is larger, the price increase this time is also more significant. Additionally, it is currently the maintenance period for major domestic vitamin suppliers, leading to a reduction in industry supply. The closure of the DSM Swiss factory's cooling water intake system due to floods and mudslides has exacerbated the tight supply of vitamin E. Furthermore, with the exit of overseas production capacity, the supply of vitamin E has been significantly optimized.
Pacific Securities believes that due to the impact of the BASF plant explosion, industry supply has significantly contracted in the short term, leading to significant price increases for vitamin A and vitamin E. Additionally, with the closure of the DSM Swiss factory and the impact of domestic maintenance season, expectations of supply tightness have intensified. Along with the impact of this force majeure factor, prices of vitamin A and vitamin E are expected to further rise. It is recommended to pay attention to Xinhecheng, Andisun, and others
