Oversupply and environmental concerns major risks for China's amino acid manufacturers

By Gary Scattergood contact

- Last updated on GMT

Oversupply could become a major challenge for China's amino acid firms. ©iStock
Oversupply could become a major challenge for China's amino acid firms. ©iStock
China’s amino acids manufacturers are expanding their production and application scope to include a broader range of supplements and pharmaceuticals, but overcapacity and environmental pollution are continuously adding high pressure on the future development.

Market intelligence firm CCM says companies are increasingly focusing on "more minor amino acids"​, like valine, isoleucine, and glutamine.

As those products are mostly sold to the healthcare and medicine industries, the profit for producers is higher than that earned from bulk amino acids, such as glycine and taurine.

Some Chinese manufacturers are also looking to introduce amino acids in cosmetics, but the lion's share of the market is still accounted for by the feed sector, due to the huge demand for poultry, and the livestock-raising industry.

Domestic fluctuations

However, with more enterprises increasing capacity, an oversupply situation may occur as a result, warns CCM​.

"The industry is already facing heavy environment pressure, which has been closely related to the fluctuations in the domestic amino acid price in the past few years. Recent years have seen increasing investments into China's amino acid production.

"Leading producers announced their latest development in production techniques or production expansion. Yet, such continual production expansion is likely to result in overcapacity in the foreseeable future, despite the growing market demand.

"Whether the overcapacity will become serious needs further observation on future production projects,"​ added the firm.

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