China's API exports will continue to grow rapidly in 2011

Business Club March 14th According to customs statistics, China exported 4.98 million tons of western drug raw materials in 2010, an increase of 23.39% year-on-year; exports totaled US$20.3 billion, an increase of 26.19% year-on-year; average export price was US$4.07/kg, a year-on-year increase. 2.27%. The export volume and export amount of APIs have grown by more than 23% year-on-year, and the average export price has also increased slightly. It can be seen that in 2010, China's bulk drug export market showed a strong recovery.

The international market is fierce, and the situation is not optimistic. According to the monthly analysis, the export volume in the first quarter is larger, mainly due to the low base in 2009; the surge in exports in March is mainly due to the concentration of goods after the Spring Festival; the export volume tends to increase in the second and third quarters. Stable and gradually strengthened in the fourth quarter, reflecting the steady development of the API market. The annual average export price did not fluctuate greatly, but the average monthly price of exports was significantly lower. However, from the month-on-month comparison, only one month in the whole year is the volume and price rise. Although the year-on-year increase in export volume was relatively large, there was a month-on-month decrease in the number of exports in 8 months, reflecting that the market development was not a steady upward trend, but rather repeated. The decline in the average export price in the first half of the month reflects the fierce competition in the international API market and the price is not optimistic.

The market structure remains the same and the mainstream market has developed in a balanced manner. In 2010, China's raw material medicines were exported to 178 countries and regions, and the growth of exports to major markets exceeded 23%, and the market showed a balanced development trend. Exports to Asia account for half of China’s exports of raw material medicines, and their export value accounts for 44.31% of the total; exports to Europe account for 23% of the total, but the amount accounts for 27.74%, and the average price is 35% higher than Asia; exports to North America The highest, accounting for 10% of the total, accounting for 15.24% of the amount, the average price is 71% higher than in Asia. Compared with 2009, the export market pattern has almost no change, and the proportion of the three major markets has not changed, accounting for an increase of 1.06% over Asia and a slight decline in Europe and North America.

In 2010, the top ten markets for raw material medicine exports in China were exactly the same as in 2009, but India replaced the United States as the largest destination country for China's raw material medicine exports. In 2010, the export volume of China's raw material medicines to the top ten markets all increased significantly, but the average export prices of the six major markets fell, reflecting that the price competition in major markets is still fierce.

Large varieties of export growth, prices generally sluggish From the perspective of large categories of raw material drugs, 19 kinds of raw material drug exports have increased in different degrees year-on-year, 63% of the export volume of major varieties increased by more than 20%. Among them, cardiovascular system drugs, cephalosporins, respiratory drugs, and macrolides increased by more than 50%. Exports of 84% of the major categories increased, and the use of cardiovascular drugs, lincomycins, cephalosporins, digestive drugs, and respiratory drugs increased by more than 40%, and tetracycline exports decreased by 40%. The average export price of 68% of the major species has increased, the largest increase in tetracyclines, up 61.5%, the average price of macrolides, hormones, export growth also exceeded 20%. There are 10 categories of large-scale varieties of prices and prices, accounting for 53%.

In 2010, there were a total of 223 coded commodity exports of raw material drugs in China, of which 177 were export varieties, accounting for 79.4%, and 24 varieties increased by more than 100%. There were 179 varieties of exports, accounting for 80% of the total. The 24 varieties increased by more than 100%. Looking at the top 10 export commodities in terms of export value, exports and exports have generally increased, but the average export price of 70% of the varieties has declined. The only varieties that have risen in both volume and price are “other unlisted antibiotics” and “unlisted”. Heterocyclic compounds" and citric acid. It can be seen that the sales growth of many large varieties is at the expense of prices, which to a certain extent also reflects the fierce competition in the market and the embarrassing situation of China's export prices for bulk APIs.

Production companies led the export, private capital into the main force in 2010 a total of 8563 companies export raw material medicine products. Eighty percent of the top 10 export companies are manufacturing companies, which means that the production companies have more advantages than pure foreign trade companies and are already the leading companies in the export of APIs. The export volume of the top ten companies has increased significantly, and 80% of the enterprises have increased by more than 20%. This reflects that the leading companies have a better operating condition. However, 40% of the company's average export price fell, reflecting that leading companies are also facing greater competitive pressures.

As far as capital classification is concerned, private capital is already the main force for the export of raw materials in China. The proportion of exports accounted for 46.51%; foreign-funded enterprises exceeded state-owned enterprises, and the proportion of exports accounted for 29.41%; and the proportion of state-owned enterprises was only 24.05%. It can be seen that the raw material drug industry is very competitive.

The future development trend of China's raw material drug exports, the author believes that in a long period of time, China's export of several drug raw materials is difficult to change: First, China's pharmaceutical exports to the main raw material-based structure is difficult to change. At present, the export of western medicine raw materials in China accounts for 85% of the total export volume of western medicines. Not only is the proportion of exports of pharmaceutical preparations small, but most of them are also sold back to international markets by multinational pharmaceutical companies. It is difficult to use the current R&D foundation and scale and strength of pharmaceutical companies in China. There is a major breakthrough in the export of pharmaceutical preparations, so it is difficult for the pharmaceutical export structure to change in the short term.

The second is that it is difficult to change the structure of low-end products for raw material medicine exports. This is because there are many raw material pharmaceutical manufacturers in China with small scale and old varieties, and the proportion of high-end products is low. The high-end products are mostly consumed in the high-end market, and the quality threshold is high. The number of companies that meet the requirements in China is small. Moreover, China’s corporate R&D capabilities are weak, product updates are slow, new products are small, and the proportion is low.

Third, the cyclical downturn in the prices of bulk commodities of APIs is difficult to change. Many large-scale products in our country have serious overcapacity problems. Because there are no effective industrial control policies and industry self-regulatory measures, these varieties often experience a vicious cycle of “price increase-capacity production expansion-low price competition”, and cyclical price fluctuations in the short term. There is no effective way to contain it.

Judging from the current situation, China's raw material medicine exports in 2011 will show the following trends:

The export of APIs will continue to maintain rapid growth. According to IMS forecasts, the global pharmaceutical market will grow by 5% to 7% in 2011, reaching US$880 billion. The global pharmaceutical market will grow at a compound annual growth rate of 4% to 7%. Therefore, the demand for APIs in the international market is also steadily increasing.

China has now become the world's largest producer of APIs. In 2008, it accounted for 9.3% of the global outsourcing market, while the market share of generic APIs outsourcing reached 37.8%. China's more than 60 kinds of bulk drugs have strong competitiveness in the international market. VC, VE, penicillin, citric acid, antibiotics, paracetamol, and other important varieties occupy a decisive position, and there are obvious competitive advantages in the bulk varieties. In recent years, although production costs have risen, companies are focusing more on potential innovation, self-digestion, and limited export prices, so Chinese raw material prices are still quite competitive. In addition, Chinese companies' efforts to pass high-end quality certification, develop expired patented APIs, undertake international pharmaceutical R&D production outsourcing, and multinational companies transfer pharmaceutical production to China, etc., China's API exports are stable and high-speed development is expected to take place. It is expected that in 2011 it is expected to maintain a growth rate of around 20%.

The growth of exports will be mainly reflected in the increase in the number, and prices will flat or slightly increase the rigid demand of the pharmaceutical market. Determined the demand for the amount of raw material drugs, China's huge production capacity also needs to be digested by the international market, which will promote the steady growth of China's raw material drug exports. However, at present, China’s bulk APIs have overcapacity, intense competition, slow international economic recovery, and devaluation of many countries’ currencies, it is difficult for China’s raw material drug export prices to rise. However, the increase in various aspects of costs also leaves export prices little downside. The raw material price may remain stable or increase slightly.