Supply Shortage and Geopolitical Tension Leads to Azithromycin Price Hike Across the Globe

Prices for Azithromycin continued to rise in August, mirroring the previous month's trend in the US and Germany. The Azithromycin prices rose due to consistent demand from end-user pharmaceutical and healthcare industries. Also, market participants had fewer inventory levels to satisfy the existing demand in the market, which further supported the upward trajectory of Azithromycin prices.

The US economy has continued to suffer due to high inflation and consistent interest rate hikes by the US Federal Reserve. The Fed's interest rate hikes are intended to raise the cost of borrowing and investment, lowering aggregate demand for goods, services, and labor in the economy. However, the Fed held another interest rate hike in August, which helped improve end-user demand and increased Azithromycin prices.

The US is China's biggest trading partner on a country-by-country basis. Recently, Chinese exports to the US market have experienced a significant decrease. China blamed US tariffs and export restrictions for a trade drop between countries. This suggests that ongoing economic rivalry and geopolitical tension between China and the United States have hindered the export of certain Active Pharmaceutical Ingredients (APIs) from China, which in turn has caused a shortage of Azithromycin in the US market, increasing prices.

Extremes also beset Europe's economy, as it experienced an economic slowdown accompanied by a decline in industrial and business activity. Prices increased by 5.3% year on year in August, contributing to increased Azithromycin prices in Germany. Furthermore, the rise in energy prices following Russia's full invasion of Ukraine was also one of the factors in the rise in Azithromycin prices. Aside from that, extreme weather conditions such as heavy rain and wildfires disrupted the supply chain in Germany, limiting suppliers' ability to deliver goods on time and driving up Azithromycin prices.

Likewise, the USA and China is Germany's most important trading partner. However, China's importance as a market in Germany is dwindling. Germany is reducing its reliance on China in "critical industries" such as pharmaceuticals. This has affected the imports of Chinese goods in the German market, which has resulted in a decrease in the supply of APIs and an increase in Azithromycin prices in Germany.

According to the ChemAnalyst forecast, Azithromycin prices continued to increase at a moderate pace in both the USA and Germany, reflecting the continued optimistic demand outlook from the end sectors amid limited supply in the market. It is anticipated that the key interest rate hikes by central banks will likely remain on hold in the coming months, which could lead to increased consumer confidence and assistance to sustain the positive market dynamics.