Baltimore’s Key Bridge Collapse Throws Azithromycin Supply Chain into Disarray

The prices of API Azithromycin experienced a significant increase in March within the USA market, continuing a trend observed in previous months. This rise can be primarily attributed to the consistent demand for antibiotics, including Azithromycin, from end-user healthcare and pharmaceutical industries, compounded by diminished inventories among market participants. Furthermore, global shipping delays and logistical bottlenecks have impeded the timely movement of Azithromycin, subsequently affecting its supply within the US market, and pushing the prices upward.

One contributing factor of this trend stems from the collapse of the Francis Scott Key Bridge on March 26, and the subsequent closure of the Port of Baltimore which have created significant disruptions in shipping routes, particularly along the East Coast of the United States. As a result, ships that were originally destined for Baltimore have had to reroute to other ports such as New York and New Jersey. The redirection of shipping routes could result in elevated transportation expenses, as products may need to cover greater distances to reach their ultimate destinations. This can lead to prolonged delivery times and drive up the prices of Azithromycin higher across the US.

Moreover, the closure of the Baltimore port also disrupts supply chains and manufacturing processes, particularly for businesses and consumers on the East Coast who rely on timely deliveries of goods. With limited options for shipping routes, shipping companies may gain pricing power and leverage this opportunity to increase rates in their contracts. Additionally, the scarcity of vessel space due to vessels being stuck or diverted further exacerbates the situation, potentially leading to higher shipping costs overall. Consequently, pharmaceutical companies might incur additional costs associated with rerouting shipments and addressing supply chain disruptions, ultimately contributing to the escalation of Azithromycin prices in the USA.

This issue coincides with global shipping challenges, including attacks by Houthi militants in the Red Sea and a Panama drought affecting traffic at the Panama Canal. These external factors compound the rise in Azithromycin prices, adding further strain to the global shipping network.

Moreover, recent data reveals China's expansive manufacturing sector rebounded into expansion in March following five months of decline, signaling economic stabilization. This resurgence, characterized by robust expansion in both supply and demand metrics after the lunar year, bolsters positive momentum in Azithromycin pricing. As China is a major exporter of Active Pharmaceutical Ingredients (APIs) to the USA, this also contributes to the rise in Azithromycin prices in the US market.

According to ChemAnalyst analysis, the prices of Azithromycin are anticipated to persistently climb in the forthcoming months, driven by sustained demand from end-sectors and constrained supply in the domestic market. Market participants are currently prioritizing inventory restocking, further fuelling this upward trajectory of Azithromycin prices. Also, the disruption caused by the collapse of the Baltimore bridge is prompting shippers to reconsider their import strategies for the upcoming months. This is particularly crucial as the restoration of the Port of Baltimore could take several months to more than a year to complete, potentially exerting a significant impact on the Azithromycin market.