Upstream changes, the export price of paracetamol APIs will skyrocket?

Recently, the news that Anhui Bayi Chemical Co., Ltd., the country's largest producer of para-aminophenol, was seized and was about to suspend production has caused a strong shock in the paracetamol industry, and the sharp price increase of paracetamol raw materials is ready to go. Paraaminophenol is the main key raw material required for the production of paracetamol, and it can be described as the "chip" of paracetamol. The stable production of paraaminophenol is crucial to the normal production and export of downstream paracetamol raw materials.

China is the world's largest producer and exporter of Paracetamol raw materials, with production capacity accounting for about half of the world; it is also the world's largest producer and exporter of para-AMINOPHENOL, with a global production capacity as high as 80%, occupying an absolute dominant position. In 2019, my country exported 38,900 tons of paracetamol raw materials with an export value of 185 million US dollars, and an export volume of 36,700 tons of p-aminophenol, with an export value of approximately 124 million US dollars. Judging from the trend of the average export prices of the above-mentioned products, there is an obvious positive price correlation between the two. It can be said that the price of paraaminophenol directly affects the market price of paracetamol in the downstream.

During the global fight against the new crown pneumonia epidemic, as the most popular antipyretic and analgesic drug, paracetamol has been unanimously recommended by WHO experts and doctors from all over the world because of its better antipyretic and analgesic effect and safety. The market demand is strong. From January to July 2020, the export volume of my country's paracetamol raw materials increased by 34%, and the export value increased by 23%. At the same time, the export of p-aminophenol has also increased significantly. The export volume from January to October 2020 is close to the level of the whole year of 2019. It is mainly exported to India, Turkey and other countries for the production of paracetamol.

The news of Bayi Chemical’s production suspension caused a wave of waves. Its world’s largest production capacity of para-aminophenol can hardly be replaced by other suppliers in a short period of time. It is expected that in the future, there will be continuous supply of para-aminophenol. Decreased exports and rising prices have led to limited domestic and foreign production of paracetamol and increased international demand for paracetamol in China. The two-way effect of supply and demand will aggravate the imbalance of market supply and demand, and the export price of paracetamol raw materials may rise.