Pindrop Silence

August is generally regarded as a slow period across the industry. Automatic ‘Out of Office’ replies abound as sales and procurement managers depart for summer vacation, and product stock sits in warehouses a little longer than usual. During this quiet time of year, even a single pin drop can be heard around the world.

This week, that pin took the form of two accidents that happened in an industrial park in Shangyu, China. One of these accidents took place at a plant belonging to NHU, a known producer of Vitamin E50 and Vitamin A. The same plant saw another explosion just two years prior. Vitamin producers and traders immediately shared the news in hopes of selling any material still left in stock. NHU however, quickly released a statement intended to calm the market:

"NHU responds to the explosion rumors: the accident in Shangyu base is expected to have no impact on the production] the Financial Association learned from NHU that the accident occurred in the production base of Shangyu, Zhejiang Province, but it is not expected to have an impact on the production of the base because it does not involve production equipment and is in the period of shutdown and maintenance."



The statement seems to have worked, with NHU’s stock (finance.yahoo.com/quote/002001.SZ/) having rebounded almost immediately after the accident and now soaring to record breaking heights. And what about the prices of Vitamin A1000 and Vitamin E50? Contrary to what you might expect, both showed no significant change from the previous week. The charts below show that on average buyers of Vitamin A1000 and Vitamin E50 got the same price or an even better price last week than the week before.

Buyers don’t seem to be buying the story around stock shortages, or perhaps the slow summer months mean that the market is slow to respond to this latest development. We may see an increase in price once the industry returns from holiday to begin wading through its overflowing inboxes. Or we may not; it is all merely speculation in the end. Rest assured that you can log into Glowlit to find out for sure.