The market price of raw materials has risen significantly, and the market demand for some raw materials has rebounded

Raw material drug refers to the raw material drug used in the production of various preparations, which is the active ingredient in the preparation, various powders, crystals, extracts, etc. used for medicinal purposes prepared by chemical synthesis, plant extraction or biotechnology, but A substance that cannot be administered directly by a patient.

The output of chemical pharmaceutical raw materials shows an increasing trend

China is one of the world’s major producers of chemical raw materials. From 2013 to 2017, the output of chemical raw materials in my country showed an overall growth trend, from 2.71 million tons to 3.478 million tons, with a compound annual growth rate of 6.44%; 2018-2019 Affected by environmental protection pressure and other factors, the output was 2.823 million tons and 2.621 million tons, a year-on-year decrease of 18.83% and 7.16% respectively. In 2020, the output of chemical raw materials will be 2.734 million tons, a year-on-year increase of 2.7%, and the growth will resume. In 2021, the output will rebound to 3.086 million tons, a year-on-year increase of 12.87%. According to the market analysis data of the API industry, from January to August 2022, the output of China’s chemical pharmaceutical raw materials will be 2.21 million tons, an increase of 34.35% over the same period in 2021.

Affected by the decline in the production of raw materials, the production costs of downstream chemical pharmaceutical companies have increased, and the price of raw materials has risen significantly. Preparation companies have successively realized the upstream and downstream connection of the industrial chain through self-built raw material drug production lines or mergers and acquisitions of raw material drug manufacturers, thereby reducing the cost incurred in the process of industrial chain circulation. According to the market analysis data of the API industry, in 2020, the operating income of enterprises mainly producing APIs will reach 394.5 billion yuan, a year-on-year increase of 3.7%. In 2021, the total operating income of China’s chemical raw material pharmaceutical industry will reach 426.5 billion yuan, a year-on-year increase of 8.11%.

The production and sales of raw materials are huge

Chemical raw materials are the basic raw materials for pharmaceutical production, which directly affect the quality and production capacity of pharmaceuticals. Due to the low technical threshold of traditional bulk pharmaceutical raw materials, the number of domestic traditional bulk pharmaceutical raw material manufacturers showed rapid growth in the early stage. According to market analysis data of the raw material medicine industry, my country’s chemical raw material medicine industry has experienced a long-term rapid development stage, and the production scale once rose to more than 3.5 million tons, resulting in overcapacity of traditional bulk medicine raw materials in China at this stage. Affected by the epidemic in 2020 and 2021, the supply and output of domestic APIs will pick up, and the output in 2021 will be 3.086 million tons, a year-on-year increase of 5.72%.

The domestic API industry has been plagued by overcapacity in recent years, especially traditional bulk APIs such as penicillins, vitamins, and antipyretic and analgesic products, which has led to a decline in the market prices of related products, and manufacturers have been bidding at low prices. Enterprises have entered the field of preparations. In 2020 and 2021, affected by the epidemic, the international community will have strong demand for some APIs related to the fight against the epidemic. Therefore, the demand for some APIs has rebounded, which has led to the temporary expansion of production by domestic enterprises.

To sum up, APIs have also been affected by the epidemic in the past two years, and the supply and output have begun to pick up since last year. Under the background of relevant policies, the API industry will develop in the direction of high quality.

Post time: Apr-01-2023