International transport is a bottleneck Global API is now out of supply concern

the rapid spread of the new crown pneumonia epidemic in the world, the pharmaceutical production supply chain has caused a greater impact, some countries reflect the tight supply of raw materials. Ministry of Industry and Information Technology officials said that so far this year, China's exports of raw materials and pharmaceuticals fell year-on-year, most products fell 10% to 20%, but there are a few varieties of exports rose year-on-year. International transport has become a bottleneck in restricting the export of API.Industry insiders believe that the recovery rate of API enterprises has steadily increased, domestic demand has been basically met, is expected to meet overseas demand, outbreak-related API exports or will usher in a short outbreak period. However, it should be noted that due to the suspension of non-epidemic medical needs, if the foreign pharmaceutical industry stop for a longer period of time, it will have a negative impact on China's api exports as a whole.

is a bottleneck in internationalXin Guobin, vice minister of industry and information technology, said on March 30 that China has more than 1,500 API manufacturers and is the world's largest producer of API. The production of API in normal years is about 3 million tons. China is also the world's largest exporter of API, the normal year of exports in about 1 million tons, about the proportion of exports in the overall API production in 1/3 of the level. In addition, China is the world's largest producer and largest exporter of vitamins, antibiotics, anti-heat analgesics, anti-infectant drugs, sebum hormone drugs, etc., accounting for more than 50% of the international market.Xin Guobin said that at present, the new crown pneumonia epidemic spread rapidly around the world, the production and supply of drugs has also had a greater impact, some countries now reflect the supply of raw materials tight. In this regard, the Ministry of Industry and Information Technology research found that there are several main factors: First, in January and February this year, due to the impact of the epidemic, some enterprises stopped production, supply there was a short-term shortage. Since February, international transportation, especially shipping and maritime transport, has been greatly restricted and affected by the spread of the international epidemic, resulting in some poor logistics and transportation difficulties.“ So far this year, API exports have fallen compared with the same period last year, with most products down about 10 to 20 per cent and individual varieties down by 30 per cent. But there are also a few varieties of exports are up year-on-year. Xin Guobin said: "We repeatedly communicate with enterprises, we reflect that the main constraints of the decline in exports are mainly shipping, international shipping significantly reduced, transport costs increased, international transport has become a bottleneck in our supply of raw materials." " outbreak caused the global API "cut-off" worryIn recent years, with the expansion of the generic drug market, and domestic production enterprises process technology, production quality and pharmaceutical market registration and certification capacity, API production capacity has been transferred to China in large numbers. Agency statistics, the current domestic API production enterprises have exceeded 8000, API exports have reached new highs.Since this year, the impact of the "butterfly effect" of the new crown pneumonia epidemic has led to an increase in the demand for end-drug products in the industrial chain, and with the increase of overseas outbreaks, incremental demand is moving along the industrial chain. But at the same time, production stagnation, poor logistics and trade controls caused by the spread of the epidemic have led directly to the obstruction of the global API supply chain.India's nationwide blockade, which began on March 25th, has raised global concerns about the "cut-off" of medicines, especially antibiotics, and heightened tensions in the global pharmaceutical supply chain. As the "world pharmacy" of India, is also an important destination for China's API exports, China Medical Insurance Chamber of Commerce data show that in 2019, China's exports to India's API products accounted for nearly 17% of China's total API exports.At present, more and more Chinese API manufacturers have resumed production, which will not promote domestic related enterprises to increase the export of API, and to meet global demand, become the focus of market attention.In response, Mr Xin said: "China, as a responsible big country, attaches great importance to the security of the global pharmaceutical industry supply chain." We will strive to maintain the production of API manufacturers, to ensure the safety and stability of the global industrial chain supply.Xin Guobin introduced, combing the national API industry chain can be seen, the current recovery rate and the production rate of major products are more than 80%, some varieties of production also exceeded the level of the same period last year, especially anti-epidemic drugs, has been the focus of supply. We feel that in this respect we can guarantee the international demand for epidemic resistance. For example, in the previous stage of the epidemic prevention process, we will be chloroquine phosphate as an effective treatment of new crown pneumonia drugs, the two major domestic API production enterprises, we timely organization of resumption of work, the current level of supply of preparations is relatively stable. At the same time, we also organize these enterprises to meet international needs, for example, Chongqing Reensoic Pharmaceutical production of hydroxychloroquine, within 5 days on the export of 4.9 tons of RAW drugs, follow-up we can also according to international market demand, to further increase supply efforts. Xin Guobin said.

the export of raw materials related to the outbreak or to meet the short-termIndustry insiders generally believe that the current epidemic in China continues to improve, API enterprises to resume production in an orderly manner, domestic demand has been basically met, is expected to meet overseas demand.Zhu Renzong, deputy secretary-general of the Branch of the China Medical and Health Products Import and Export Chamber of Commerce, said that the "New Coronavirus Pneumonia Diagnosis and Treatment Program" will enhance the international market demand for related drugs, including RAW Drugs, and the demand for other drugs directly related to the prevention and treatment of New Coronary Pneumonia will also increase, and the export of relevant RAW drugs in China may usher in a short outbreak period.Will the global supply of RAW drugs affect the performance of the companies involved in the ongoing fermentation of overseas outbreaks? Southwest Securities believes that in the medium to long term, export-oriented API prices will be an inevitable trend. In addition, through the outbreak stress test, highlighting the domestic FDA, the European Union certified specialty raw materials, intermediates in the global pharmaceutical industry, the past was significantly underestimated by the market.Tonghuashun data show that the A-share api-based pharmaceutical 29 companies, including Boten shares, Tong and Pharmaceuticals, Jinda, Fuxiang shares, New Novo is expected to grow in the first quarter of the performance, of which Boten shares are expected to increase by more than 200%. 　　A pharmaceutical industry source said that with the development of the global epidemic, rising demand for exports, the future in the trend of rising prices, or the second quarter performance of API companies have a positive impact. However, similar to the previous domestic situation, non-epidemic medical needs or suspension, if the foreign pharmaceutical industry stopped for a longer period of time, the overall impact on China's API exports is negative. 　　At present, China's API industry is mainly concentrated in vitamins, antibiotics, hormones and other varieties of bulk API, analysts expect that the production of bulk API will be more and more concentrated, the process will be further improved. At the same time, there is a huge space for development in the development of specialty API and patented API. 　　It is understood that the next step of the Ministry of Industry and Information Technology will also organize the implementation of key products monitoring and production scheduling, coordination to solve the problems encountered by enterprises in export transport difficulties, strengthen communication and docking with WHO, foreign business associations, multinational pharmaceutical enterprises, organize enterprises targeted to carry out supply services, to ensure the supply of domestic and international markets, for the world to make due contributions to the fight against the epidemic. (Economic Reference)