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Oil industry recovers, and xanthan gum prices continue to climb

Author: Site Editor     Publish Time: 2022-09-13      Origin: Site

Analysis of the current situation of supply and demand in xanthan gum industry

In recent years, the annual global demand is about 300,000 tons. At present, my country is the largest producer of xanthan gum, with an annual production capacity of about 220,000 tons. my country's xanthan gum production enterprises are in a leading position in the world. The main manufacturers of xanthan gum in my country are Fufeng Group, Meihua Bio and Zhongxuan Biochemical, of which Fufeng Group is the largest xanthan gum manufacturer in the world. In 2019, Fufeng Group's xanthan gum revenue was 891 million yuan, a year-on-year increase of 1.6%. The production of xanthan gum increased by 19.2% compared with 2018, and the sales volume increased by 7.5% compared with 2018. Due to the continued downturn in the oil industry, the average selling price of xanthan gum fell to approximately RMB 14,725 per ton in 2019, a decrease of 5.2% from 2018. The annual production capacity of xanthan gum of Fufeng Group remained at a reasonable level of 65,000 tons.

Price Trend Analysis

Xanthan gum is widely used as emulsifier, stabilizer, gel thickener, sizing agent, etc. in the fields of oil extraction and food addition. Recently, benefiting from the recovery of the oil industry, the price of xanthan gum continues to rise. The data shows that in 2018, thanks to the increase in production capacity, the development of new customers and the reduction of production costs, the overall sales volume, selling price and profit margin of xanthan gum have increased significantly compared with 2017, of which the sales volume has increased by about 50%, and the sales The price increased by about 20%.


Demand analysis

Food grade xanthan gum demand

In recent years, the rapid growth of the food and beverage industry brought about by the economic prosperity of developing countries, especially the BRICS and Saudi Arabia, will become the main driver of global demand for food-grade xanthan gum. With the demand for gluten-free food in recent years, food additives such as xanthan gum will gradually gain the favor of more consumers. With the upgrading of the industry and people's increasing requirements for nutrition and food safety, high-priced and high-quality food additives such as xanthan gum will usher in greater demand growth.


Industrial Grade Xanthan Gum Demand

As a thickener for oil and gas exploitation, xanthan gum has the advantages of excellent thickening properties, low friction resistance, high fracture-making efficiency, strong sand carrying capacity, low cost, convenient preparation, good flowback and small residues. It is gradually used in the oil and gas exploration industry.

With the sharp dive in global crude oil prices, higher requirements have been placed on oil exploration cost control. Guar gum, the mainstream fracturing fluid thickener in the past, is gradually being replaced by xanthan gum.

Guar gum and xanthan gum are both natural plant polysaccharides with similar properties. However, guar gum can only be grown and produced in regions such as India and Pakistan, and there are bottlenecks in capacity expansion. In the case of an increasingly imbalanced supply and demand, prices continue to rise. Xanthan gum is considered by the industry to be the most substitute for guar gum in the food and industrial fields, and is expected to gradually seize market share in the fields of petroleum and food.


Supply side

At present, enterprises are available for full production. The objective conditions for the industry to start construction in the third and fourth quarters are sufficient, and the supply continues to increase, but it is still slightly insufficient in terms of demand. In terms of new production capacity, the third phase of Baicheng Plum Blossom has a capacity design for xanthan gum, and the industry capacity base may increase during the year. In terms of substitution, the import volume of guar gum is less than 10% of the domestic monthly output, and the total import volume is relatively limited. And in terms of use effect, xanthan gum has more advantages in stability and plasticity, and the substitution effect of guar gum is not obvious.


Combined with the analysis of supply and demand factors, the market supply of xanthan gum increased slightly in the second half of the year, while the export boom value was high, and the overall demand was expected to be preferred. It is expected that in a state of tight supply and demand, the market price of xanthan gum will continue to run at a high level. Pay attention to the changes in the new production capacity of the industry.

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