Bullish Downstream Demand Drives Up the Ofloxacin API Prices in the United States

Bullish Downstream Demand Drives Up the Ofloxacin API Prices in the United States

Bullish Downstream Demand Drives Up the Ofloxacin API Prices in the United States

  • 18-Oct-2022 3:56 PM
  • Journalist: Francis Stokes

Los Angeles, US: In the US, the prices of Ofloxacin API have increased since the beginning of October 2022 and are expected to incline further. This upward price trend is supported by tight supply from the exporting countries, mainly China.

Because of strong demand from the downstream pharmaceutical industries, the Ofloxacin API market in the US is on the higher side. Additionally, with dwindling supplies and rising consumer queries, the price of Ofloxacin API jumped by 1.59 percent in October 2022. Secondly, the exporting nations' trading momentum has been weaker, a significant factor in depleting the local vendor's stock for Ofloxacin API in the US.

Moreover, China is the primary exporter of Ofloxacin API to the United States. As it entered into the Golden Week holiday, which starts from the 1st of October 2022 till 7TH of October 2022, zero-COVID" measures have resulted in lockdowns in dozens of cities, and the current impact of Typhoon Muifa and Typhoon Hinnamor has led to port closures just ahead of the Golden Week in China. These activities are anticipated to cause the shutdown of most factories along with the stoppage of work at its ports, resulting in delayed shipments to the ports of the United States. Because of this, the suppliers in the US tend to increase their quotation rates and were eager to purchase more of Ofloxacin API before Golden Week, so they may resell it at a higher price and make a respectable profit.

Furthermore, the inflation rates are still comparatively high, negatively impacting all the sectors, including the pharmaceutical one. Also, it has kept the cost of raw materials, food, energy, and gas on the higher side, keeping the prices on a higher note in the regional and international markets.

According to the Chemanalyst: " Ofloxacin API prices may incline on a similar trajectory in the following months. Ease in transportation and covid-restriction might further support the pricing sentiments of Ofloxacin API ".The primary reason behind this price rise of LDPE is that the end-use pharmaceutical industry recovers faster from high inflation rates compared to the other polymers' end-use industries. Several European manufacturers have informed that energy surcharges would be added to LDPE prices, further abetting the price rises of LDPE in the global market.

While fundamentals are still weighing on LDPE prices, players now believe that higher production costs will prevent suppliers from offering even lower rates and even prompt them to cut fill rates. PE markets bottomed out, and despite a drop in upstream ethylene prices, LDPE prices were rising and clearly at a high based on recent historical data. However, these prices will remain the same as long as increasing energy costs and operating speed reductions are applied. 

The price difference between Italy and other European countries this year is due to the limited availability of LDPE film feedstock in Europe. The strong exchange rate between the USD and Euro also contributes to the rise in LDPE prices. Although the LDPE market in Italy (and Western Europe) remains higher than other markets, the price gap has narrowed since May 2022.

According to ChemAnalyst, the demand for LDPE throughout this fourth quarter of 2022 in the Europe market is expected to be dull as it is visible as many downstream manufacturers report low order entries, blaming rampant inflation for the drop in consumer spending. Despite significant declines in the resin market, end-product prices remained high due to rising utility costs hurting consumption. Regional producers have begun to reduce their operating costs around the summer to rebalance supply and demand. Due to higher energy costs, more suppliers will likely run at lower rates until the end of the year. It is unlikely for any significant alteration to take place anytime soon.


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