At the "58th China International Pharmaceutical API, Intermediates, Packaging, and Equipment Spring Fair" (API China) that just ended on May 17, the prices of smiling faces, raw materials, and intermediates for the exhibitors have become the most impactful. The point of view. The slogan of the exhibition, "The World Raw Material Drug Looks at China, China Raw Material Drugs Look at API China," has become a true portrayal of China's raw material medicine. Since the bulk raw material medicine price rebounded in September last year, the price increase momentum that has lasted for more than half a year has caused all parties in the market to feel the advent of China's raw material boom cycle.
Entering the business cycle The data provided by Yu Xiong, deputy director of the Shanghai Pharmaceutical Industry Research Institute, shows that since 2007, the China Pharmaceutical Sector Index has increased by 128.7%, the Shanghai Composite Index has increased by 50.4%, and most medical stocks have higher valuations. Judging from the API trade fair, in the international market, the major raw material varieties, penicillin industrial salt three major nuclear series, VC, VB and Other prices have greatly improved, even if it is defined by the economic field " Old dog products such as caffeine and ibuprofen are also rising. Among them, the "Made in China" representative species of penicillin industrial salt, the current price has soared to 140 yuan / billion units, and the trend of rising prices continues to be a shortage of market supply.
Zhou Yan, secretary-general of the China Chemical Pharmaceutical Industry Association, believes that the rebound in the raw material medicine market indicates that the country's macro environment is changing and the company's managers are more rational.
In the past 20 years, raw material medicines in China have been struggling in the winter, and rapid development and disorderly competition have become two characteristics. In 2003, the penicillin industrial salt exploded rapidly due to a sharp increase in production capacity. In 2004, the price had fallen to a low point. Every billion units were hovering around US$5. Some small and medium-sized enterprises went bankrupt. Others reduced costs. West shifts production. At the same time, penicillin salt and VC’s largest buyers, India and the United States, launched anti-dumping and anti-monopoly investigations against China, casting a shadow over the export trade of Chinese APIs.
Wu Huifang, deputy general manager and chief researcher at HealthNet, believes that because of the internal and external problems of China's raw material medicines, after 2004, China's bulk drug companies began to become more rational, and the raw material medicine industry slashed the “thinning down†to limit production and switch production. The company began to reflect on the business ideas of relying on scale and price to win. At the same time, rising energy prices, increasing international and domestic standards for environmental protection, and strategic adjustments of multinational API companies have formed a number of thrusts in the past two years. The international API market has started to pick up from last year, and Chinese companies have directly benefited. By.
It is understood that from the external environment, at the end of 2004, antibiotic giant Dutch DSM Group announced the reform of its antibiotics sector, including the closing of penicillin industrial salt and 6-APA plants in Delft, Holland, in the first half of 2005. The cephalosporin intermediate plant in Groningen ended the 6-APA manufacturing company co-founded with GlaxoSmithKline. After India initiated the anti-dumping and withdrawal of penicillin salt, China's penicillin salt production has already achieved the leading position in the international market, and the export volume has been rising. According to the statistics released by the China Chemical Industry Association, in 2006, the domestic production of industrial salt of penicillin exceeded 30,000 tons. If some of the pharmaceutical companies such as the federal Pengzhou and Shanxi Tongling that directly converted to 6-APA were produced, penicillin industrial salt was added. The actual output has exceeded 42,000 tons, reaching more than 90% of the world's total demand of 45,000 to 50,000 tons.
At the same time, as domestic environmental protection requirements are getting higher and higher, first-line production companies have restricted production to varying degrees, and some have failed to comply with environmental protection requirements for stopping production, and new enterprises have set higher barriers to entry.
The industry believes that the spring of Chinese raw material medicine is the result of long wait, it can be described as rainbow after the storm.
The inflection point where the raw material market's warmth actually did not dissolve everything. In the raw material drug industry chain, smile does not belong to every company.
As prices of penicillin industrial salt increased, the prices of intermediates 7-ADCA, 6-APA, and GCLE also rose rapidly, while downstream hemi-green and cephalosporin manufacturers were at the same time being squeezed due to price restrictions on formulations. In order to get rid of restrictions and cost pressures, the trend of the company's industrial chain extending to the downstream is obvious. The staff of Shandong Ruiyang Group's Ruigao Pharmaceutical Co., Ltd., raw material drug sales company, said that although the raw material drug market is getting warmer, due to the soaring cost of intermediates and lower prices for downstream formulation companies, the days for companies that simply synthesized raw material medicines are not good.
Another concern for API companies comes from how long the market will last in spring and whether the boom cycle will be a flash in the pan and whether it will be a new round of price wars.
Industry figures calculate that the penicillin industrial salt will take into account changes in the export tax rebate rate by 4% and the appreciation of the renminbi by more than 6%, plus the cost of environmental protection control will increase by 5% to 10%. In theory, 120 yuan/billion have been Is a high price, and some companies currently penicillin industrial salt has been quoted at 175 yuan, although there may be no market price, but it will still form a strong attraction to stop companies and capital, and if the market once detonated, China The API may once again fall into the cycle of price war.
In fact, this is not alarmism. On May 13th, it was reported that Jiangxi Dongfeng Pharmaceutical had restarted production and Livzon Group had plans to resume production. In March of this year, Federal Pharmaceuticals announced that it plans to build a new production base of 10,000 tons of penicillin industrial salt and 5,000 tons of 6-APA annually in Bayan Zall, Inner Mongolia.
In India, the strongest competitor of raw material drugs, the cost of power is about 30% higher than that of domestic products, and the comparable cost of Indian products is about 60 yuan/billion (comparable with the average domestic production level), which can effectively attract the purchase of Indian market. If the price of Chinese products is too high, it will affect the enthusiasm of imports.
Wu Huifang believes that the current price risk of penicillin lies in that if it exceeds the bottom line of the demand side, it cannot ensure market demand, it will prompt the raw material drug companies to resume production, and downstream large-scale pharmaceutical companies may also enter the raw material drug industry to get rid of restrictions.
For the inflection point of this wave of raw material drug market, industry analysts have to wait until the emergence of a landmark event. "Now Dongfeng Pharmaceuticals has resumed production. After the product comes out, it may be a symbolic moment to ease the tension in the current market supply. Later, the launch of the Federal Pharmaceuticals Inner Mongolia production line is another landmark event that may change the pattern." According to the analysis, In accordance with the past, the production cycle for the production of a raw material drug line of similar size will be completed and the federal production line of the company will be completed and put into operation in November of this year.
Prospects Assumed at the raw material pharmacy meeting last year, some experts had boldly envisioned the future of Chinese raw material medicines: One day, Chinese raw material medicines will become the focus of global pharmaceutical companies. Although this prediction is bold, from the perspective of the market performance of China's raw material medicines in recent years, with the increase in the degree of intensive production of bulk products, raw material medicines do constitute an inestimable influence on the procurement of pharmaceutical companies and global raw materials.
Li Yuqing, former general manager of North China Pharmaceutical Ochid Pharmaceutical Co., Ltd., said that the division of labor between China and India has always been the most basic rough processing in China, such as penicillin industrial salt. India buys raw materials in China to make intermediates and then returns them to the market. China. However, with the improvement of Chinese raw material drug technology, downstream fine processing has already begun to show signs. In April, India launched an anti-dumping investigation against China's 7-ACA. This indicates that the industrial progress of Chinese raw material drugs has started to change the world's APIs. Industry pattern.
A clear theme of the API Forum is the exploration of innovative low-cost strategies and cooperation models in the field of APIs between China and India. Unlike previous forums, today's cooperation between China's API and India seems to have more say.
Wu Huifang summed up the market performance of raw material medicines in China last year, said that the main characteristics of China's bulk drugs last year were as follows: First, there appeared a group of target companies that focused on the international market. They obtained certification registration in different countries, and the target was the mainstream market. Second, the environmental protection system, production costs and personnel quality have raised the operating costs of enterprises; there are one or two iconic varieties in each major series.
“With the increase in the value of Chinese raw material medicines, Chinese raw material medicines may gradually get rid of marketing strategies that rely on economies of scale and low prices, but the increase in production costs may lead to a shift in the production of the next raw material medicine,†said Li Yuqing.
No one can predict the future, but today's rebound in the Chinese raw material medicine market is different from the short-term rest after the price war. With the further standardization of the country's macro environment, companies are more rational, and low-value-added products are constrained. The extension of high value-added products is believed to be an inevitable trend. Perhaps this is the real boom cycle of APIs.
Entering the business cycle The data provided by Yu Xiong, deputy director of the Shanghai Pharmaceutical Industry Research Institute, shows that since 2007, the China Pharmaceutical Sector Index has increased by 128.7%, the Shanghai Composite Index has increased by 50.4%, and most medical stocks have higher valuations. Judging from the API trade fair, in the international market, the major raw material varieties, penicillin industrial salt three major nuclear series, VC, VB and Other prices have greatly improved, even if it is defined by the economic field " Old dog products such as caffeine and ibuprofen are also rising. Among them, the "Made in China" representative species of penicillin industrial salt, the current price has soared to 140 yuan / billion units, and the trend of rising prices continues to be a shortage of market supply.
Zhou Yan, secretary-general of the China Chemical Pharmaceutical Industry Association, believes that the rebound in the raw material medicine market indicates that the country's macro environment is changing and the company's managers are more rational.
In the past 20 years, raw material medicines in China have been struggling in the winter, and rapid development and disorderly competition have become two characteristics. In 2003, the penicillin industrial salt exploded rapidly due to a sharp increase in production capacity. In 2004, the price had fallen to a low point. Every billion units were hovering around US$5. Some small and medium-sized enterprises went bankrupt. Others reduced costs. West shifts production. At the same time, penicillin salt and VC’s largest buyers, India and the United States, launched anti-dumping and anti-monopoly investigations against China, casting a shadow over the export trade of Chinese APIs.
Wu Huifang, deputy general manager and chief researcher at HealthNet, believes that because of the internal and external problems of China's raw material medicines, after 2004, China's bulk drug companies began to become more rational, and the raw material medicine industry slashed the “thinning down†to limit production and switch production. The company began to reflect on the business ideas of relying on scale and price to win. At the same time, rising energy prices, increasing international and domestic standards for environmental protection, and strategic adjustments of multinational API companies have formed a number of thrusts in the past two years. The international API market has started to pick up from last year, and Chinese companies have directly benefited. By.
It is understood that from the external environment, at the end of 2004, antibiotic giant Dutch DSM Group announced the reform of its antibiotics sector, including the closing of penicillin industrial salt and 6-APA plants in Delft, Holland, in the first half of 2005. The cephalosporin intermediate plant in Groningen ended the 6-APA manufacturing company co-founded with GlaxoSmithKline. After India initiated the anti-dumping and withdrawal of penicillin salt, China's penicillin salt production has already achieved the leading position in the international market, and the export volume has been rising. According to the statistics released by the China Chemical Industry Association, in 2006, the domestic production of industrial salt of penicillin exceeded 30,000 tons. If some of the pharmaceutical companies such as the federal Pengzhou and Shanxi Tongling that directly converted to 6-APA were produced, penicillin industrial salt was added. The actual output has exceeded 42,000 tons, reaching more than 90% of the world's total demand of 45,000 to 50,000 tons.
At the same time, as domestic environmental protection requirements are getting higher and higher, first-line production companies have restricted production to varying degrees, and some have failed to comply with environmental protection requirements for stopping production, and new enterprises have set higher barriers to entry.
The industry believes that the spring of Chinese raw material medicine is the result of long wait, it can be described as rainbow after the storm.
The inflection point where the raw material market's warmth actually did not dissolve everything. In the raw material drug industry chain, smile does not belong to every company.
As prices of penicillin industrial salt increased, the prices of intermediates 7-ADCA, 6-APA, and GCLE also rose rapidly, while downstream hemi-green and cephalosporin manufacturers were at the same time being squeezed due to price restrictions on formulations. In order to get rid of restrictions and cost pressures, the trend of the company's industrial chain extending to the downstream is obvious. The staff of Shandong Ruiyang Group's Ruigao Pharmaceutical Co., Ltd., raw material drug sales company, said that although the raw material drug market is getting warmer, due to the soaring cost of intermediates and lower prices for downstream formulation companies, the days for companies that simply synthesized raw material medicines are not good.
Another concern for API companies comes from how long the market will last in spring and whether the boom cycle will be a flash in the pan and whether it will be a new round of price wars.
Industry figures calculate that the penicillin industrial salt will take into account changes in the export tax rebate rate by 4% and the appreciation of the renminbi by more than 6%, plus the cost of environmental protection control will increase by 5% to 10%. In theory, 120 yuan/billion have been Is a high price, and some companies currently penicillin industrial salt has been quoted at 175 yuan, although there may be no market price, but it will still form a strong attraction to stop companies and capital, and if the market once detonated, China The API may once again fall into the cycle of price war.
In fact, this is not alarmism. On May 13th, it was reported that Jiangxi Dongfeng Pharmaceutical had restarted production and Livzon Group had plans to resume production. In March of this year, Federal Pharmaceuticals announced that it plans to build a new production base of 10,000 tons of penicillin industrial salt and 5,000 tons of 6-APA annually in Bayan Zall, Inner Mongolia.
In India, the strongest competitor of raw material drugs, the cost of power is about 30% higher than that of domestic products, and the comparable cost of Indian products is about 60 yuan/billion (comparable with the average domestic production level), which can effectively attract the purchase of Indian market. If the price of Chinese products is too high, it will affect the enthusiasm of imports.
Wu Huifang believes that the current price risk of penicillin lies in that if it exceeds the bottom line of the demand side, it cannot ensure market demand, it will prompt the raw material drug companies to resume production, and downstream large-scale pharmaceutical companies may also enter the raw material drug industry to get rid of restrictions.
For the inflection point of this wave of raw material drug market, industry analysts have to wait until the emergence of a landmark event. "Now Dongfeng Pharmaceuticals has resumed production. After the product comes out, it may be a symbolic moment to ease the tension in the current market supply. Later, the launch of the Federal Pharmaceuticals Inner Mongolia production line is another landmark event that may change the pattern." According to the analysis, In accordance with the past, the production cycle for the production of a raw material drug line of similar size will be completed and the federal production line of the company will be completed and put into operation in November of this year.
Prospects Assumed at the raw material pharmacy meeting last year, some experts had boldly envisioned the future of Chinese raw material medicines: One day, Chinese raw material medicines will become the focus of global pharmaceutical companies. Although this prediction is bold, from the perspective of the market performance of China's raw material medicines in recent years, with the increase in the degree of intensive production of bulk products, raw material medicines do constitute an inestimable influence on the procurement of pharmaceutical companies and global raw materials.
Li Yuqing, former general manager of North China Pharmaceutical Ochid Pharmaceutical Co., Ltd., said that the division of labor between China and India has always been the most basic rough processing in China, such as penicillin industrial salt. India buys raw materials in China to make intermediates and then returns them to the market. China. However, with the improvement of Chinese raw material drug technology, downstream fine processing has already begun to show signs. In April, India launched an anti-dumping investigation against China's 7-ACA. This indicates that the industrial progress of Chinese raw material drugs has started to change the world's APIs. Industry pattern.
A clear theme of the API Forum is the exploration of innovative low-cost strategies and cooperation models in the field of APIs between China and India. Unlike previous forums, today's cooperation between China's API and India seems to have more say.
Wu Huifang summed up the market performance of raw material medicines in China last year, said that the main characteristics of China's bulk drugs last year were as follows: First, there appeared a group of target companies that focused on the international market. They obtained certification registration in different countries, and the target was the mainstream market. Second, the environmental protection system, production costs and personnel quality have raised the operating costs of enterprises; there are one or two iconic varieties in each major series.
“With the increase in the value of Chinese raw material medicines, Chinese raw material medicines may gradually get rid of marketing strategies that rely on economies of scale and low prices, but the increase in production costs may lead to a shift in the production of the next raw material medicine,†said Li Yuqing.
No one can predict the future, but today's rebound in the Chinese raw material medicine market is different from the short-term rest after the price war. With the further standardization of the country's macro environment, companies are more rational, and low-value-added products are constrained. The extension of high value-added products is believed to be an inevitable trend. Perhaps this is the real boom cycle of APIs.
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