Increased export growth potential, both volume and price of API inclined

At present, the spread of New Coronary Pneumonia epidemic in the world has caused many impacts on the development of China's API industry. Facing the new market structure at home and abroad, what new development opportunities will China's API industry usher in?


Export market may usher in a brief outbreak

At present, China's new coronary pneumonia epidemic prevention and control achievements have been globally recognized. China's "New Coronavirus Pneumonia Diagnosis and Treatment Program" will also increase the international market demand for related drugs including raw materials during the epidemic, and other drugs related to pneumonia prevention and treatment Will also increase. China's export of relevant raw materials may usher in a short period of outbreak.

One is anti-virus. The diagnosis and treatment plan of our country directly recommends ritonavir, ribavirin, chloroquine phosphate, and abidol for the treatment of new coronary pneumonia. The relevant raw materials are all produced in China. Some antiviral APIs used for the treatment of influenza and AIDS, such as oseltamivir, darunavir, acyclovir, etc., have also seen market demand increase. In 2019, the export value of China's antiviral APIs and intermediates is about 600 million US dollars.

The second is antibacterial. Antibacterial drugs can be used in combination to treat bacterial infections caused by new coronary pneumonia, and can also prevent potential bacterial infections in severe and critically ill patients. China's diagnosis and treatment plan recommends the use of quinolones, second and third generation cephalosporins, carbapenems and other antibacterial drugs. China is a major producer and exporter of antibacterial APIs, with output accounting for more than 60% of the world's total. Exports in 2019 will reach US $ 5.4 billion. Penicillins, cephalosporins, macrolides, and nitrazoles are all important export varieties in China.

The third is antipyretic and analgesic. Antipyretic drugs are indispensable drugs in the treatment of new coronary pneumonia characterized by fever. China is a major producer and exporter of paracetamol, ibuprofen, analgin, and other antipyretic and analgesic APIs, with exports reaching US $ 640 million in 2019. Among them, paracetamol, which has good safety, has only antipyretic and analgesic effect, and no anti-inflammatory effect, has been recommended by WHO experts and doctors from various countries, causing a large number of foreign people to buy it. The annual production of paracetamol raw materials in China is about 80,000 to 90,000 tons, accounting for more than 60% of the world. Last year, the export volume was 38,900 tons, and the export value reached 185 million US dollars.

The fourth is vitamins. Vitamins are generally believed to enhance physical fitness and prevent disease. During the epidemic, the demand for medication and nutrition and health care have increased. In addition, the international vitamin giants such as BASF in Germany, DSM in the Netherlands, and Adisseo in France are all likely to be discontinued due to the epidemic. The international market orders for vitamins in China have increased, and the market prices for various varieties have risen. In 2019, the export value of vitamin raw materials in China was US $ 2.7 billion, but the average export price fell by 21%. This year, China's export of vitamin APIs has ushered in a period of opportunities for both volume and price, and corporate profits will return to a reasonable level.

Fifth is hormones. For severe and critically ill patients with new coronary pneumonia, glucocorticoid therapy will also be used as appropriate. Demand for APIs such as methylprednisolone, prednisolone and cortisone may also increase. In 2019, the export volume of hormone raw materials in China was 1,443 tons, and the export volume reached US $ 890 million.

Sixth is cardiovascular. When using a ventilator, it is possible to use anticoagulants such as heparin. In recent years, China's exports of heparin APIs have increased year by year, reaching US $ 1.106 billion in 2019. Overseas, there is also an increase in reserve orders for hypolipidemic and hypotensive APIs. In 2019, China's exports of related APIs exceeded US $ 1 billion.

Resume production in time to ensure market supply

From the domestic point of view, the resumption of production and production in various places is in full swing, including APIs and upstream chemical intermediate companies, which have basically been resumed, and domestic logistics have gradually returned to normal. The rate has gradually increased, and foreign trade orders delayed due to the epidemic have been successively delivered to customs clearance and shipped. The gradual resumption of production of raw material pharmaceutical companies in China can ensure a stable and sufficient supply to the international market, which is also our country's strong support for the global anti-epidemic cause.

As another major producer and exporter of APIs, in order to give priority to domestic supply during the epidemic, India has restricted the export of some APIs and their preparations. At the same time, Indian companies have also intensified their efforts to inquire from China and purchase APIs, which will further increase the export growth potential of China's related APIs.

At the press conference of the Joint Defense and Joint Control Mechanism of the State Council on April 8, Cao Xuejun, deputy director of the Consumer Goods Industry Department of the Ministry of Industry and Information Technology, said that the production of APIs in the first quarter of this year was basically the same as that of last year. As a result, the actual export volume of APIs has decreased by about 20% compared with last year, but APIs related to the treatment of new coronary pneumonia have achieved a contrarian growth. For example, the export volume of Hydroxychloroquine Sulfate in the first quarter has exceeded that of last year; the output of Paracetamol in the first quarter increased by 20% year-on-year, and the export volume increased by 30%; the export volume of vitamin C in the first quarter increased by 10%.


Policies help enterprises stabilize exports

In addition to changes in supply and demand, policies are also escorting the development of the foreign trade of APIs. The Ministry of Commerce, Ministry of Industry and Information Technology, General Administration of Customs, Ministry of Finance and other ministries and commissions have launched a number of favorable measures to promote the resumption of production and production of enterprises, provide trade financing facilities, strengthen export protection, improve customs clearance efficiency, and ensure the normal progress of foreign trade.

While making good use of relevant support policies, China's API companies should also base on their own advantages and proceed from the overall situation of the industry to maintain the competitive advantage and international status of China's API industry.

One is to avoid vicious competition. In 2019, there are 12,000 companies operating in the export of APIs in China. In recent years, the number of export companies has been continuously increasing. The increased demand for some APIs caused by the epidemic and the steady foreign trade preferential policies issued by the government will attract more companies to pay attention to the international market. Enterprises should do a good job in market demand and competition situation analysis, maintain reasonable profits in international competition, and avoid homogenous and vicious competition to prevent harm to the industry and the market.

The second is to pay attention to market risks. With the spread of foreign epidemics, domestic enterprises should also pay attention to the risk of foreign customers rejecting goods or not clearing customs due to the epidemic, unable to pay foreign exchange or refuse to pay due to work from home, and enterprises should do a good job in risk assessment, customer communication and other preliminary work. New customers and new orders should pay attention to prevent risks.

The third is to avoid short-term behavior. Enterprises should avoid blindly starting temporary projects such as new production lines and new registration certification due to increased current demand and the pursuit of short-term benefits. Otherwise, once the epidemic is over or future competitors re-enter the market, short-term investment is likely to be lost before the results are seen. Market situation.

The fourth is to make long-term plans. The epidemic situation may promote the restructuring of the global API industry and trigger the reshaping of the global pharmaceutical supply chain. Chinese companies should actively strive for long-term orders, make good capital accumulation, product development and technological updates to prepare for new international competition in the future.