Surrounded by difficulties, after the sharp rise in feed raw materials such as vitamins, the prices of veterinary raw materials have also surged, leading to a major reshuffle in the raw material industry. Will veterinary medicine rise as a result?

With the surge in raw material prices, animal health companies are facing severe tests. Will veterinary medicine see a significant price increase?

As the national environmental protection rectification actions continue and escalate, the "environmental protection wind" is intensifying across various regions. Recently, the Ministry of Environmental Protection, the National Development and Reform Commission, and 10 other ministries jointly issued the "Action Plan for Comprehensive Governance of Air Pollution in the Beijing-Tianjin-Hebei and Surrounding Areas for Autumn and Winter 2017-2018" (referred to as the "Plan"), emphasizing that pharmaceutical companies involved in the production of raw materials will be suspended if they violate emission procedures.

It is reported that at the end of last year, raw material production companies such as Shiyao and North China Pharmaceutical were ordered to suspend production due to failing to meet environmental standards, suffering heavy losses. According to North China Pharmaceutical's announcement, the loss of net profit due to the suspension was 549.3 billion yuan. Industry insiders stated: "Many raw material pharmaceutical companies are major polluters, and taking such serious measures will inevitably shut down a number of factories. The downstream may face occasional shortages, but terminal drug prices are unlikely to rise accordingly."

Since July, most basic raw materials have skyrocketed without warning, with an overall increase of 30%. Some raw materials, such as vitamin C, have even increased by more than 100%. Worse than the price surge is that some raw materials have already stopped being supplied in the market, directly affecting the operations of downstream animal health companies, which can only temporarily consume their inventory.
Analysis of the veterinary feed raw material market, raw material drugs are in short supply.

It is understood that currently, for example, the price of formic acid used to make thiabendazole was only 3,250 yuan/kg in Hebei last year, but has now risen to 6,000 yuan/kg; the price of vitamin C has increased from over 20 yuan/kg to over 60 yuan/kg; the price of sodium bicarbonate has risen from 1,800-1,900 yuan/ton to 2,300-2,400 yuan/ton, and citric acid has increased from 5,000 yuan/ton to 6,000-7,000 yuan/ton.

In addition, antibiotics are also facing severe shortages and price surges in the market. Currently, florfenicol is out of stock. Amoxicillin, which was 130 yuan/kg at the same time last year, has now risen to 165 yuan/kg.

Broad-spectrum antibiotics: Due to environmental protection and other factors, the main intermediates such as penicillin industrial salt, amoxicillin, and ampicillin from some manufacturers continue to stop reporting, and the market supply tightness has increased rather than decreased. The prices of similar products have risen in tandem. According to previous market monitoring, the increase in transaction volume at the market level supports the price, which has room for further increases, warranting close attention.

Amide alcohols: Some manufacturers of florfenicol and methenamine have stopped accepting orders and continue to raise prices. Some manufacturers have entered a state of production restriction or suspension. As it enters the sales peak season, supply capacity is insufficient, and market prices are likely to rise further, warranting close attention.

Tetracyclines: Oxytetracycline and hydrochloride oxytetracycline are affected by environmental pressure, and Jianmin has entered the suspension process. It is reported that production will be fully suspended in October, with expectations to resume production in 2018. The supply from Huashu and Jianmin is tight, and the market in this sector is active, with prices continuously increasing. According to this trend, hydrochloride doxycycline (strong mycin) will also be affected, increasing the upward pressure, warranting close attention.

Macrolides: Erythromycin thiocyanate has seen a slight price increase due to environmental protection reasons. According to market feedback, there are signs of stockpiling and manufacturers stopping reporting, and the current price is in a consolidation state. Prices of tylosin and tiamulin have been rising recently due to environmental protection and adjustments in sales policies by some manufacturers, so please pay attention to future trends.

Aminoglycosides: The price of amikacin is stable; neomycin sulfate is supplied normally, with weak market trends previously, now stabilizing. The price of gentamicin sulfate is stable. Streptomycin sulfate has limited supply, with previous export contracts being executed, leading to supply difficulties. As a result, domestic procurement has increased, and prices have surged.

Sulfonamides: Due to high upstream raw material prices for an extended period, the prices of sulfonamide products are running at high levels. Zhejiang Huangyan Veterinary Pharmaceutical Factory has fully suspended production due to environmental protection reasons since July, and the prices of its main sulfonamide products, such as sulfanilamide and sulfanilamide methoxypyrimidine (sodium), continue to rise.

Quinolones: The main domestic producers of enrofloxacin hydrochloride are Guobang and Langbo, both of which are in key environmental protection monitoring areas and have reduced production. The prices have been steadily increasing, and it is expected that they will continue to rise, warranting ongoing attention.

Antipyretic and analgesic drugs: The price of phenacetin has risen due to tight upstream raw materials and a high volume of export orders, leading to reduced production and insufficient supply, with market circulation prices increasing. The prices of paracetamol have risen recently due to changes in supply and demand in the market. The market for antipyretic and analgesic products has seen price increases due to rising upstream raw material prices and significant environmental protection pressures. The sales prices have already been adjusted, with reports of price increases for Hebei Jiheng's phenacetin, aminopyrine, and paracetamol products. Please continue to pay attention. The price of taurine remains high.