Rising Demand and Supply Constraints Push up Prices of Metformin HCL in China

In China, the prices of Metformin HCL increased in July 2023 due to an increase in demand from end sectors amid less supply in the market. Market participants were focused on restocking fresh inventories, which also limited the supply of Metformin HCL in the market. Apart from that, prices of API (active pharmaceutical ingredients) increased in China, further supporting this upward trend of Metformin HCL prices.

Metformin is an FDA-approved antihyperglycemic medicine as it lowers blood glucose levels in type 2 diabetes patients. It is also used off-label to treat patients having insulin resistance in PCOS (polycystic ovary syndrome). Metformin HCl is a popular drug for people with type 2 diabetes because it is safe, effective, and unlike other diabetes drugs, it does not cause weight gain. In addition, rising diabetes cases, adaptation to unhealthy lifestyles, and rising numbers of obese people are major factors driving the increasing demand for Metformin HCl.

Recently, AstraZeneca's Xigduo XR drug (combination of Metformin HCL and dapagliflozin) has recently got approval from China's regulatory authority NMPA (National Medical Products Administration) for the treatment of adults having T2D (type 2 diabetes). This medicine is directed for increasing glycaemic control, in addition to exercise and diet. It is another reason that the increased demand for Metformin HCl in the Chinese market put upward pressure on prices.

According to the National Bureau of Statistics (NBS), China's manufacturing PMI (Purchasing Managers Index) came in at 49.3 in July from 49.0 in June. A PMI above 50 points reflects an expansion in manufacturing activity, while a reading below 50 points reflects a contraction. Factory activity in China fell for the fourth consecutive month in July as the world's second-largest economy struggles to regain growth momentum. This month's reading indicates a drop in manufacturing activity, leading to lower output and tight inventories in the market. However, market demand has improved from the previous month with a rise in the number of new orders, leading to an increase in the price of Metformin HCL. In addition, the supply chain was also disrupted due to climate change in China, causing delays in delivery times to meet domestic demand, causing the price of Metformin HCL to rise.

As per the ChemAnalyst analysis, prices of Metformin HCl are projected to remain on the higher side in upcoming months in China due to a further increase in demand from end-user pharmaceutical and healthcare industries. Moreover, trading activities are likely to improve, which might keep the market situation favorable.