Global API orders or transfer to China

According to CPA, the global API market will reach US $186.4 billion in 2020, with a year-on-year increase of 6.1%.

The API market is on the rise.

The Indian government announced on March 3 that the export of 26 active pharmaceutical ingredients (API) and preparations made from them would be restricted from now on; on March 24, India announced a national blockade for 21 days. This not only reduces the global supply of APIs, but also increases the prices of major APIs.

Many people believe that as the world’s largest producer of API, overseas orders are expected to transfer to China. Zhu Guoguang, an analyst at Southwest Securities Research and Development Center (5.370, – 0.04, – 0.74%), believes that China, as a major exporter of characteristic API, has led to stagnation of API production and transportation during the epidemic period, and the supply chain of some overseas pharmaceutical enterprises has been disrupted.

With the development of overseas epidemic situation, the supply shortage of characteristic raw materials is increasing, which leads to the price rise. This is also expected to accelerate the transfer of overseas innovative drug outsourcing orders to China.

So, do Chinese api enterprises really usher in new opportunities?

The reporter learned that after capacity transfer in recent years, the global API market has formed a global API capacity supply pattern dominated by China, India and Western Europe.

In 2019, China’s API will be exported to 189 countries and regions. According to the data of China Pharmaceutical (14.910, – 0.27, – 1.78%) health care products import and Export Chamber of Commerce, in 2019, China’s API export volume was 10118500 tons, an increase of 8.83% year-on-year. Among them, the API products exported from China to India account for nearly 17% of China’s total API exports.

In terms of market scale, benefiting from the steady growth of the demand for pharmaceutical preparations in the downstream, the CPA predicts that the global API market size will reach US $186.4 billion in 2020, with a year-on-year growth of 6.1%. It will be mainly driven by characteristic and patent APIs.

China is now in the middle and late stage of the epidemic, and API manufacturers in major production areas such as Zhejiang Province have returned to work. In the case of a large gap in global API supply, API prices may continue to rise, and overseas orders are expected to be transferred to China.

The importance of China in the global pharmaceutical industry chain is self-evident. Novel coronavirus pneumonia, however, highlights the importance of China’s API industry in the global industrial chain, and also poses a huge challenge for the development of China’s pharmaceutical industry.

A number of people from API enterprises told the first finance and economics reporter that the impact of the international epidemic situation on international freight logistics is mainly reflected in freight transport capacity and cost.

In April 8th, novel coronavirus pneumonia was released by Cao Xuejun, deputy director of the Ministry of consumer goods industry, the first quarter of this year.

The output of API was basically the same as that of last year. The production of raw materials has been fully restored. The actual export volume of API has been reduced by about 20% compared with that of last year, but it has been in an opposite trend with the treatment of new crown pneumonia related drugs.

Qilu pharmaceutical told the first financial reporter: “the volume of exports to the United States in January and February increased by 195% compared with the same period last year.

But now flights are cancelled in large areas, and international aviation logistics has become a major obstacle. Companies need to book in advance for a long time, which is often not easy to book, and the freight rate will rise several times or even double. “

The dilemma faced by Qilu pharmaceutical is also the epitome of opportunities and challenges faced by Chinese api enterprises.

The epidemic situation has led to the shortage of overseas supply, including the shutdown and reduction of production and export restriction of API producing countries such as India and Italy, resulting in the shortage of production and supply of some drugs in the standardized market in Europe and the United States, and the price increase is obvious.

Overseas orders are expected to be transferred to China, but the international transportation challenge is difficult to solve in a short time.

A market person from an API enterprise in East China told reporters of China’s first finance and economics that the possibility of overtaking in a curve in the near future is low. Because the domestic raw material medicine also must conform to the local laws and regulations, obtains the certain qualification. In addition, when the global industrial chain is in suspension, orders are only delayed and will not necessarily disappear.

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Global API orders or transfer to China

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