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The story behind the price volatility of Chinese APIs in 2007
For the Chinese Active Pharmaceutical Ingredients (API) industry, the year 2007 was full of uncertainties. Pressures from the domestic and overseas pharmaceutical markets have exposed the potential risks to the Chinese API market, and have set the trends for the coming cycles in the evolution of the industry.
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Cost advantage, which used to be a merit of pharmaceutical exportation, is being offset by the dwindling of global energy resources, domestically, the launch of the Discharge Standard of Water Pollutants for Pharmaceutical Industry forced the API manufacturers to assume responsibilities in environmental protection, which means that the players need to embrace a new definition for the term "cost".
In 2007, major APIs made great achievements. However, far-sighted industry insiders did not rejoice as most APIs were exported as intermediates while the core technology is still in the hands of non-Chinese producers.
Major APIs such as Ceftriaxone Sodium and Amoxicillin witnessed major ups and downs in price during 2007, revealing that the profit growth point of Chinese pharmaceutical enterprises are gradually switching towards downstream products. A rapid expansion into downstream products is regarded as a key way out for enterprises to stave off risks and improve their product value, as well as an industrial development trend. Ceftriaxone Sodium, for example, has seen fierce competition both in the API sector and the preparation sector, thus is most vulnerable to various factors. Throughout 2007, the price of Ceftriaxone Sodium API shifted frequently as a result of the converging attack from both the upstream and the downstream sides of the business. In spite of the relative price stability i n the first half, the price of Ceftriaxone Sodium API started skyrocketing in August as a result of the supply suspension of 7-ACA intermediate before diving at the end of November.
Exports of Ceftriaxone Sodium API to India were also challenged in 2007. On November 12, the Indian authority passed an anti-dumping sanction against China-exported Ceftriaxone Sodium to block Chinese made Ceftriaxone Sodium from the Indian market. As a result, China has to give up the market temporarily or export 7-ACA instead of Ceftriaxone Sodium. The sanction will be valid until the end of May, 2008. To annul the sanction, it is pivotal for the Chinese exporters to prove that the exporting of Ceftriaxone Sodium is not dumping.
For more information contact:
Wen Jian
Email : cleo.albert@intelligentpublishingmedia.com
URL : http://www.asia-manufacturing.com
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