In 2019, South Africa, the world's largest chromium producer, supplied 12.5 million tons of chrome ore to China, accounting for 83% of China's total chromium imports. Chromium, of course, is a key raw material in the production of Vitamin K3 MSB and Vitamin K3 MNB. Last month, South Africa announced an export tax on chrome ore. Both producers and distributors have used this announcement to incentivize customers to stock up in advance of rising prices.

We saw a similar development back in May at the peak of COVID market disruptions. Demand for chromium powder tanning agent, which is used widely in the fashion and car industries, had dropped substantially. Since chromium powder is the result of Vitamin K3 production and has substantial disposal costs, producers responded by reducing the production of K3 to contain outputs placing upward pressure on the price.

What lesson can we apply to the situation today? In May we saw that market demand was the deciding factor in the price trend direction for Vitamin K3. Demand will undoubtedly be the key factor in determining the price over the final months of 2020.