For the Quarter Ending June 2023
North America
In the second quarter of 2023, ibuprofen prices in the US market fell significantly due to sporadic fluctuations between supply and demand during the month. With unusually low purchases by the end-use industry, domestic suppliers have large amounts of ibuprofen in their warehouses, resulting in continuously lower costs in the domestic market. The euro strengthened against the US dollar in the second quarter of 2023. This made it more expensive for US buyers to purchase the ibuprofen drug substance from Europe, which also contributed to the price drop. The price was valued at USD 10,110/CFR New York as of the end of Q2 2023, down an average of 9.06% quarterly. Falling fares also supported the downward trend. US imports are falling as companies struggle to sell excess inventories. Import cargo volumes at major US container ports also fell. Geopolitics have always pushed importers to ship their goods through East Coast ports. In addition, weak demand and high inventories further weighed on market trading fundamentals. Moreover, despite stagnating demand, retailers are facing bloating inventory ordered to meet increased demand and potential future shortages during the pandemic.
Asia
The market price of ibuprofen experienced a significant decline in the second quarter of 2023 due to weak domestic and international orders. The price was valued and acquired at 22,650 USD/MT FOB Shanghai as of the end of Q2 2023, down an average quarterly of 7.67%. Prices fell significantly in the second quarter. During the quarter, the PMI fell below 50 points, suggesting that the manufacturing sector was contracting. China's import and export activities were mixed. Exports decreased by 3.9% from the previous year, while imports increased by 1.9%. The decline in exports was due to the ongoing COVID-19 pandemic, the Russo-Ukrainian war, and the slowdown in the global economy. The surge in imports was driven by government efforts to revive the Chinese economy and boost domestic demand. China's slowdown in manufacturing activity and slowing service sector growth are the latest examples of difficulties in the uneven economic recovery after COVID-19. Meanwhile, the Chinese government has taken measures to cool the economy, such as raising interest rates and curbing the money supply. Furthermore, market sentiment remained subdued due to declining buyer hunger, slowing sales from downstream industries, and a lack of new inquiries from domestic and foreign suppliers. Some market participants have reduced inventories of ibuprofen APIs to reduce inventories and improve cash flow.
Europe
Market conditions for ibuprofen API showed a downward trend in the second quarter of 2023. Ibuprofen prices fell 9.04% on average over the quarter to 10060 USD/MT CFR in Hamburg. Ibuprofen prices in Germany were on a downward trend as demand from downstream sectors and imports from exporting countries such as China slowed. Market sentiment was further supported by improved trading activity. Tariffs between China and the West Coast of the United States recently reached pre-pandemic levels, greatly reducing congestion, which has also lowered sea freight prices, impacting overall market conditions. Germany's inflation rate fell to 7.4% in March 2023, according to a report from the Federal Statistical Office. Additionally, German consumers are experiencing falling energy costs, which may come as a surprise to those accustomed to rising energy costs. This decline in demand and the continued supply of generic drugs drove prices down. German consumers are increasingly choosing over-the-counter pain relievers over prescription drugs. This is due to several factors, including the convenience and low cost of OTC medicines.
For the Quarter Ending March 2023
North America
Ibuprofen displayed strong market dynamics with minimal fluctuation in the first quarter of 2023. With the start of Q1 2023, prices increased through the end of February, supported by sustained purchases from the pharmaceutical end-user industry and merchant stocks to meet demand. Also, the ease of trade disruption supported the Ibuprofen market trend from January. With an average quarterly inclination of 1.32%, the settlement price of Ibuprofen API was recorded at USD 14580/MT CFR in New York. The energy cost was also 19.1% higher in February than a year earlier. Also, better trade flow and simpler logistic charges compared to the prior quarter influenced the market situation positively. On the other hand, the prices dropped in the month of March, backed by enough inventories and low offtakes from the end-user sector.
Asia
Ibuprofen prices witnessed an increasing trajectory in the APAC region in the first quarter of 2023. After the Lunar New Year break, the Chinese pharmaceutical markets technically returned on a positive note with an increase in orders and shipments from both the domestic and the international market. After a week-long Lunar New Year break, Asian currencies, particularly the Chinese Yuan (RMB), rose in the month of January as Chinese markets resumed trade. As the market was reopened, factory and port operations resumed. Also, with the soaring offtake and increase in the no. of international orders, Ibuprofen prices increased in the Chinese market. At the termination of Q1 202, the settlement price of Ibuprofen API accessed at USD 14550/MT EXW Hebei with an average quarterly inclination of 1.56%.
Nonetheless, the prices stabilized at the termination of Q1 2023, as the strict Covid laws lifted, revitalizing the second-largest economy in the world. Also, the recovery of production quickened, along with the rising demand, and kept the market stable. Moreover, supply-chain conflicts greatly decreased, which improved trade with foreign nations.
Europe
In the first quarter of 2023, Ibuprofen showcased stable market dynamics with slight fluctuation. With the commencement of Q1 2023, the prices rose till the end of February, backed by consistent offtakes from the pharmaceutical end-user sector and inventories among the merchants to cater to the demand. Further, the ease in trade disruption reinforced January’s market trend of Ibuprofen. Also, the Euro currency apprenticed against the USD in the month of January, influencing the market sentiments. During the month of March, the settlement price of Ibuprofen API came down to USD 14880/MT CFR Hamburg with an average quarterly inclination of 0.42%. Moreover, by the termination of Q1 2023, the prices dropped by 1% as the inquiries remained feeble and the merchants had enough supplies.
Ibuprofen API witnessed shifting market patterns in the North American region during the fourth quarter of 2022. Beginning with Q4 2022, prices were predicted to rise till the termination of the first month due to a high cost of manufacturing, numerous logistical problems, and rising inflation. Additionally, the market position was maintained well by rising transportation costs and port congestion at the major ports. Later with the commencement of the second month of Q4 2022, the prices drop down considerably till the end of Q4 2022 on the back, lowering inquiries, bearish demand from the downstream sector, softening inflation, and ease in the transportation and decreased freight charges. During the month of December, the settlement price of Ibuprofen API came down to USD 13810/MT CFR in New York.
Ibuprofen prices significantly dropped in the APAC area in the fourth quarter of 2022. Due to ongoing geopolitical unrest and production halts in several industrial facilities in the Asia-Pacific region, the price trend started to rise progressively in Q4 2022. Later, as Q4 2022's second month gets underway, prices start to fall abruptly as end-user sector demand declines. As production costs dropped on the domestic market, prices fell dramatically. Prices were also lowered to pre-pandemic levels. The Ibuprofen market remained weak due to adequate supplies and stockpiling among the merchants. During the month of December, the settlement price of Ibuprofen API came down to USD 13500/MT EXW Hebei.
Ibuprofen's market dynamics in Europe changed negatively due to a fall in demand, a cessation of inquiries from the pharmaceutical end-user sector, and surplus inventories among local retailers. Due to geopolitical unrest and port congestion, prices started to increase gradually in the first half of Q4 2022. Ibuprofen prices later started to drop at the beginning of the second month of Q4 2022 despite the uncertainties because of a dramatic drop in inquiries, abundant supply, and a consistent market attitude. Additionally, the weakening consumer attitude in December was further boosted by the approaching holidays and festival season. During the month of December, the settlement price of Ibuprofen API came down to USD 14520/MT CFR Hamburg.
