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Omeprazole Prices Dip as Demand Slows, Raw Costs Drop
Omeprazole Prices Dip as Demand Slows, Raw Costs Drop

Omeprazole Prices Dip as Demand Slows, Raw Costs Drop

  • 04-Jun-2024 3:45 PM
  • Journalist: S. Jayavikraman

In May, global prices for Omeprazole fell due to reduced demand from end-user industries. Market participants faced with excess inventories sought to offload their stock at lower prices, leading to subdued market sentiments. A contributing factor to this trend was the decrease in pyridine prices, a key raw material for Omeprazole. The drop in pyridine prices was due to slow market offtakes and limited purchases from suppliers to buyers, resulting in lower production costs for Omeprazole and consequently, a decline in its prices.

China's manufacturing activity unexpectedly declined in May, with the official manufacturing purchasing managers' index (PMI) dropping to 49.5 from 50.4 in April, according to the National Bureau of Statistics (NBS). This decline marked a 3-month low and came as a disappointment following recent strong industrial activity data. The PMI was significantly weaker than market expectations and forecasts, which had anticipated an increase. The primary driver of this month's decline was a fall in new orders and new export orders, both of which slipped back into contraction after two months of expansion. This downturn has also contributed to the downward trend in Omeprazole prices.

As China is a major exporter of active pharmaceutical ingredients (APIs), including Omeprazole, Western markets experienced a similar downward trend.

The Eurozone economy grew faster than anticipated as it emerged from recession, although its growth remains sluggish compared to the strong performance of the US economy. The European Central Bank is expected to start reducing eurozone interest rates from their historic highs this week, but persistent inflation suggests this move will not trigger a rapid series of cuts. Preliminary data from Eurostat indicates that the consumer prices in the eurozone increased by 2.6% year-on-year in May, up from 2.4% in April, surpassing the 2.5% forecast. This is the first rise in the annual inflation rate since December 2023. This persistent inflation continues to weigh on consumer sentiment, leading to a decline in Omeprazole prices.

Meanwhile, the US economy experienced a slowdown in the first quarter, with growth tapering off and an unexpected rise in inflation. Recent data indicates that US consumer sentiment dropped to a six-month low in early May, driven by increasing short-term inflation expectations, which also contributed to the decline in Omeprazole prices. At its May 2024 Federal Open Market Committee (FOMC) meeting, the Federal Reserve announced its decision to maintain the overnight federal funds rate within the current range of 5.25% to 5.5%.

According to ChemAnalyst's analysis, there's a possibility of Omeprazole prices rebounding in the upcoming months, driven by increased purchases from end-consumers. Central banks in Western regions could consider lowering interest rates, potentially easing the financial strain on consumers and aiding in the rise of Omeprazole prices. Furthermore, an uptick in trading activity could also have a positive influence on the Omeprazole market.

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