Acetic Anhydride Prices Rise Amidst Strong Demand from Downstream Pharmaceuticals

Southampton (UK): This week, Acetic Anhydride prices in the UK have shown an upward trend. This increase is attributed to the rising costs of imports from Saudi Arabia, where supply did not meet heightened demand, leading to Acetic Anhydride inventories being sold at premium rates. Additionally, demand from the downstream pharmaceutical sector has surged in the recent months thus catapulting the consumption rates, with AstraZeneca reporting a 19% increase in total revenue for Q1 2024, reaching USD 12,679 million.

This growth was driven by an 18% rise in Product Sales and ongoing growth in Alliance Revenue from partnered medicines. Specifically, Total Revenue grew by 26% in Oncology, 23% in CVRM, 17% in R&I, and 16% in Rare Disease. The Core Product Sales Gross Margin was 82%, and the Core Operating Margin was 34%, with a Core Tax Rate of 21%. Core EPS increased by 13% to USD 2.06, although this growth was lower than the Total Revenue increase due to a USD 241 million gain in the prior year from the sale of Pulmicort Flexhaler US rights.

At the Annual General Meeting on April 11, 2024, it was announced that the total dividend for FY 2024 would increase by USD 0.20 per share to USD 3.10 per share. The Total Revenue and Core EPS guidance at CER for FY 2024 were reiterated, indicating sustained high demand from the Acetic Anhydride downstream pharmaceutical sector, which led to increased Acetic Anhydride downstream inquiries.

This week, the prices of Acetic Anhydride in UK have shown bullish market trends. This development is attributed to firm cost support for the Acetic Anhydride feedstock Acetic Acid. With Acetic Anhydride market stocks remaining low, traders were in advantageous positions, leading to stocks being sold at higher rates.

Additionally, the Bayer Group, a major international company from Belgium, reported Group sales of Euro 13,765 million in the first quarter of 2024 (Q1 2023: Euro 14,389 million), reflecting a –0.6% change on a currency- and portfolio-adjusted basis and –4.3% on a reported basis. There was a negative currency effect of Euro 525 million (Q1 2023: positive currency effect of Euro 102 million).

ChemAnalyst expect further increase in the prices of Acetic Anhydride in the European region and specifically, in the UK, on the back of firm demand sentiment in the European nations. The consumption rates from pharmaceutical industry are expected to remain strong resulting in ample demand pressure on the Acetic Anhydride prices.