ZMC Plant Under Maintenance Over Lunar New Year: Impact on Market Dynamics

This year, 2024, witnessed the Chinese Lunar New Year unfolding without the constraints of COVID-19 for the first time. Revered as one of China's most cherished holidays, the Lunar New Year heralds the advent of spring and the dawn of a new year in accordance with the lunisolar calendar. However, for shippers and businesses alike, this festive period brings about unique logistical hurdles. Production decelerates, operations are curtailed, schedules encounter upheaval, and transportation faces delays, all culminating in notable disruptions to the supply chain.

Moreover, upon the resumption of operations post-holiday, factories grappled with staggered returns of workers, with some potentially not returning at all. Additionally, some large domestic factories underwent maintenance, leading to the suspension of quotations. In a recent update, Zhejiang Medicine Co., Ltd. (ZMC), a prominent joint-stock pharmaceutical company established in May 1997, announced scheduled maintenance from early February to mid-March. ZMC specializes in large-scale production of various pharmaceutical and nutraceutical products, including fat-soluble vitamins, quasi-vitamins, quinolone antibiotics, anti-drug-resistant antibiotics, and more. Notable products from ZMC include Vancomycin, Biotin, Levofloxacin, Vitamin E, Vitamin A, among others. This maintenance period may impact the availability of these products during the specified timeframe.

During the scheduled maintenance period, ZMC undertakes a range of activities such as conducting inspections and repairs on its machinery and facilities, optimizing manufacturing processes, ensuring compliance with regulatory standards, adjusting inventory management practices, and communicating with stakeholders to minimize disruptions. These activities aim to maintain optimal performance, efficiency, and compliance while ensuring the smooth functioning of operations and minimizing impact on product availability and delivery schedules.

In the domestic market, the decreased economic activity and lower demand for pharmaceutical and nutraceutical products during the Lunar New Year holiday, coupled with ample inventories, may contribute to price stability. However, the scheduled maintenance at ZMC could potentially disrupt the supply of its products, leading to temporary fluctuations in prices depending on the duration and extent of the maintenance activities.

Market distributors in international markets may have proactively stocked up on inventories before the holiday season to meet demand and mitigate the impact of supply chain disruptions. This strategic stockpiling could help stabilize prices and ensure a more consistent supply during the Lunar New Year period. However, the ongoing plant maintenance scheduled until March might constrain the supply, potentially exerting upward pressure on prices in the international markets.

According to ChemAnalyst, following the completion of plant maintenance, manufacturing activities are poised to increase in response to the rising demand from both domestic and international markets. The optimization of manufacturing processes during the maintenance period is expected to enhance production efficiency. As operations are streamlined, cost savings and heightened overall productivity are anticipated, which can help alleviate upward pressure on prices, allowing ZMC to maintain competitiveness in the market.