Vitamins surge driven by deliberate supply cuts, not just Middle East shock

Short answer: supply-side squeeze, not a one-off geopolitics spike

The sharp jump in vitamin A and E prices is primarily the result of an intentional supply retrenchment by major producers, not solely a temporary shock from the Middle East. Wind data shows vitamin A has risen from ¥60.5/kg to ¥110/kg (up 82%) and vitamin E from ¥57.5/kg to ¥97.5/kg (up 70%). Is this a flash in the pan? Reportedly, no — the market is showing the early stages of a cyclical recovery led by producers with pricing power.

Industry structure and why firms can push prices

Vitamins are small-volume, high-value chemicals whose largest end market is animal feed (about 80%), followed by pharmaceuticals and food. Global production is concentrated among European giants DSM (帝斯曼) and BASF (巴斯夫) and Chinese leaders such as Xinhecheng (新和成) and Zhejiang Medicine (浙江医药), creating a near‑oligopoly (CR5 > 80% for key products). In such a structure, supply decisions—not sudden demand shocks—determine sustained price trends.

How the current rally was engineered

The recent price rally followed a sequence of strategic moves. After earlier disruptions (it has been reported that BASF’s 2024 Ludwigshafen incident tightened supply), some firms expanded, but by mid‑2025 major producers reportedly announced prolonged maintenance shutdowns (6–14 weeks), and adopted “stop quoting, stop signing” tactics to pause new orders and test higher offers. Market sources and broker notes (e.g., Guosen Securities, Kaiyuan Securities) suggest inventories are now low and lead times extended, amplifying the effect. Geopolitical risks around the Strait of Hormuz acted as a catalyst for costs and sentiment, but the decisive push came from conscious supply-side discipline by dominant firms.

Outlook: a multi-quarter story with selective winners

Restarting idled chemical lines takes weeks to months; rebuilding capacity takes around two years, so a rapid supply rebound is unlikely even if shipping routes normalize. That makes a sustained, cyclical rebound plausible over the next 1–2 quarters. Investors should watch major producers — DSM (帝斯曼), BASF (巴斯夫), Xinhecheng (新和成), Zhejiang Medicine (浙江医药), Adisseo (安迪苏) and Wanhua Chemical (万华化学) — but note valuation dispersion: some names sit near decade highs while others look cheaper. Loss-making segments (biotin/VB7, B2, VB5) could also see profit recovery if producers keep constrained supply. In short: geopolitics lit the fuse; oligopolistic supply management is burning the fire.