US Paracetamol API Prices Surge in August 2023 Amidst Supply Chain Disruption

In a surprising turn of events, Paracetamol Active Pharmaceutical Ingredients (API) prices experienced a substantial increase in the Global market during August 2023, leaving pharmaceutical manufacturers and healthcare professionals puzzled. Paracetamol API, also known as Acetaminophen, is a widely used pain reliever and fever reducer, making it a crucial component in countless medications.

Several factors have contributed to this price increase. One of the primary factors contributing to the surge in Paracetamol API prices is supply chain disruptions. Disruptions in logistic shipping and raw material sourcing have rippled through the industry, affecting the production of essential pharmaceutical ingredients like Paracetamol API.

China, often recognized as the global hub for pharmaceutical production, plays a significant role in manufacturing Paracetamol API. However, disruptions in the import of essential raw materials and a scarcity of critical manufacturing components within China have disrupted the Paracetamol API production process. Consequently, manufacturers are grappling with heightened production costs and decreased yields, resulting in elevated prices for Paracetamol API. The domestic market for the key raw material, acetic anhydride, has experienced a notable upward trend, with prices steadily rising. This surge can be attributed primarily to a tight domestic supply, which favored suppliers and pushed the price of acetic anhydride. Earlier in the month, Yankuang Lunan and Jiangsu Sopu faced brief operational halts due to unexpected malfunctions.

Nevertheless, downstream activities remained resilient, leading to increased quotations from acetic anhydride manufacturers. Subsequently, Tianjin Soda Plant reduced its operational capacity and utilization rate while maintaining low inventory levels and predominantly fulfilling long-term contracts. This situation resulted in a scarcity of goods in the market. The demand for acetic anhydride downstream continued to surge, bolstered by strong cost support, ultimately leading to an increase in acetic anhydride prices. This complex raw material landscape has contributed to a tight Paracetamol API market in China.

The substantial increase in global demand, including the US market, has placed significant pressure on the pharmaceutical supply chain, including Chinese manufacturers, as they strive to meet the growing requirements. Producers of Paracetamol API are grappling with production capacity limitations and supply chain interruptions. Despite these challenges, they have been functioning at full capacity to fulfill the demand, inadvertently stretching their resources thin and escalating their production expenses. Meanwhile, the prolonged dry season and low water levels in the US have necessitated operational adjustments, particularly affecting our largest vessels operating on the Asia/US East Coast route, to accommodate the available draft.

Fluctuations in currency exchange rates can exert a substantial influence on the pricing of pharmaceutical raw materials and APIs that are imported. Over the past few months, the Chinese yuan (CNY) has undergone fluctuations relative to major currencies, such as the US dollar (USD). Chinese manufacturers frequently depend on imported machinery and raw materials, and any devaluation of the yuan can result in elevated expenses for these crucial components. These increased costs ultimately translate into higher prices for Paracetamol APIs.

As per the analysis conducted by Chemanalyst, it is anticipated that the global prices of Paracetamol API are poised for continued appreciation. This trend is expected due to the escalating costs of raw materials, driven by the rising energy prices. Additionally, the burgeoning demand from downstream industries is set to contribute to the prevailing market tightness.