Gloomy Start for the US Zidovudine API on the back of Diminishing Demand

Since the beginning of September, the Zidovudine API in the US market appeared to be declining due to stable supply and depreciating downstream demand. The bearish trend pursued from the second half of August, as consumers were reluctant to make significant purchases due to the rising inflation in the US market. Also, Zidovudine API suppliers have been reducing their offers to sell out the available stocks as the peak season for its end-use industries is about to end.

Amidst rising inflation, global imports and exports have marginally declined because of headwinds in worldwide trade and high inventories across the domestic market. Due to Russia-Ukraine and China-Taiwan crisis, the supply chain has been disrupted, and purchasing power has also dwindled, affecting the off-take. As a consequence, the demand showcases signs of a slowdown. The International Monetary Fund projected global growth to obtuse strongly, from 6.1% to 3.2% in 2022 and 2.9% in 2023. As an impact, a slower growth rate intends lower commodity demand and sinking prices. According to traders in the US, Zidovudine API demand weakened due to a fall in consumption because of local inflation. They further stated that by decreasing freight costs from the APAC region, Zidovudine API prices might continue to fall over in the future, especially in the import sector.

For the time being, in China, the Zidovudine API market also observed weaker sentiments, as prices fell by 3.6% starting September 2022. China's economy has faltered, dramatically affecting the importing countries' markets. The growth in the USA turned negative in the second quarter of August as Shanghai, and other large producing cities endured lockdowns under the zero covid policy. As an impact, the central producing units discontinued affecting the trading activity.

According to ChemAnalyst Database, "The Zidovudine API market may remain truncated at its current levels or see a slight improvement in the following months, especially due to the hikes in natural gas and electricity prices, which may affect the production units. Thus, more attention must be paid to production costs.