Veterinary drug apis are expected to rebound in 2024

In 2023, the veterinary drug raw material price index (VPi) almost showed a unilateral decline, the overall decline of 19.82%, although there is a small rebound from May to July, but the overall downward trend does not change, the second half of the index continues to refresh the low point since the VPi preparation. From the unilateral decline of the index and the continuous refresh of the low point, we can also see the continued weak situation of the veterinary drug API market in the past year.

2023 The overall decline in the veterinary drug API market is the result of a combination of factors.

1. Lack of demand. In 2023, affected by the continuous loss of the downstream farming industry, the terminal demand of the veterinary drug API market has shrunk, and the lack of demand has become the main factor for the overall decline of the veterinary drug API market this year.

2, the market is cautious, the mentality is short. As the market demand is not strong, the mainstream varieties of veterinary drug apis market prices continue to fall, "buy up do not buy down", the trade level and the terminal market become more cautious, the middle and downstream more wait-and-see, maintain just need, the procurement and production of veterinary drug apis conservative attitude, market turnover did not increase significantly because of the significant decline in product prices.

3. Technological progress. Technological advancement is also an important factor affecting the veterinary drug API market. With the continuous progress of science and technology, the process is constantly improved, the cost can be reduced, and the price of upstream manufacturers is possible.

4. Capacity expansion. In recent years, the production capacity of the mainstream category of veterinary pharmaceutical raw material industry has been greatly expanded, the market supply has increased, in the context of weak demand this year, the contradiction between supply and demand is more intense, in the situation of oversupply, manufacturers have reduced the price of shipments has become the norm, so that prices continue to fall.

5. Manufacturer game. With the increase of supply and the contraction of demand, the price game of manufacturers is particularly fierce this year, and in order to compete for market share, upstream manufacturers compete by reducing prices, which also leads to a decline in the price level of the entire market.

The veterinary drug API market experienced a comprehensive decline in 2023, encountered unprecedented challenges, the market shape is very different from before, and the market itself has also undergone some changes that require special attention.

1. Technology advances, prices fall, and the survival of the fittest accelerates. In 2023, in the context of shrinking demand and falling prices, some weak and technologically backward enterprises gradually withdrew from the market, making room for industry consolidation, and accelerating the survival of the fittest in the market. On the other hand, under the fierce competition, the technology leader will maintain the advantage, and the weak party will have to stabilize its market share through technological innovation, quality improvement and other ways, which will help improve the competitiveness and development level of the entire industry.

2. The upstream and downstream links of the industrial chain are accelerated. With the expansion of the veterinary drug API market in 2023, another significant feature is that enterprises extend upstream and downstream of the industrial chain through vertical integration, investment and mergers and acquisitions. First of all, downstream pharmaceutical enterprises develop in the direction of upstream apis in order to reduce dependence on external suppliers, improve production efficiency and better control quality and production costs, and enhance their competitiveness. Secondly, API enterprises develop downward and extend the industrial chain upward, in order to get rid of the constraints of upstream synthetic raw material sources and open up the veterinary drug preparations market, improve their market competitiveness, and better respond to market changes.

3, large farming group access. Similarly, in order to achieve the vertical integration of the industrial chain and reduce production costs, recently some large farming groups are also involved in the port of veterinary drug apis, the access of large farming groups may have a significant impact on the market pattern, and the intensity of market competition may increase.

4. Accelerated production and expansion. Due to the prospects of the veterinary drug industry, more and more enterprises have begun to increase production and expansion, and there is no shortage of capital to join in order to expand production scale and increase production capacity. There are not only old players in the veterinary drug API market, but also new players outside the industry.

Overall, the prospects of the veterinary drug API industry are promising, production expansion has become a trend, the upstream and downstream industry chain is more coherent, the internal volume of technology will continue, under the combined effect of large farming group access and other factors, the market pattern is undergoing profound changes, we believe that these changes not only help to enhance the competitiveness of the industry, but also help to promote the development level of the entire industry.

Although the current veterinary drug API market situation is more severe, but there are some positive signs, is the so-called decline will rise for a long time, cathode Yang, 2024 will stabilize and improve.

First of all, with the improvement of the economic situation and the recovery of the farming side, the market demand side is expected to gradually pick up, laying the foundation for the restoration of the 2024 veterinary drug API market.

Secondly, the expansion and new construction will continue, the mainstream market is optimistic about the future development of veterinary drug apis, with the new construction and expansion of production, the pressure on the supply side will continue in 2024.

Third, under the support of costs and profits, enterprises continue to have greater pressure to reduce prices, the price mentality is rising, the veterinary drug API market may reduce prices significantly, and the expectation of a rebound will gradually increase with the recovery of demand. From the point of view of manufacturers' willingness, manufacturers have the possibility of reducing supply in order to stabilize prices.

Finally, with the improvement of the market environment, the confidence of the middle and lower reaches has gradually recovered, and it is not ruled out that under the psychological condition of "buying up and not buying down", with the rise in prices, the middle and lower reaches have entered a wave of buying peak.

Overall, in 2024, the veterinary drug API market is expected to achieve a recovery in demand, under the support of costs and profits, the veterinary drug API market will get out of the current weak supply and demand dilemma, the supply side will have a certain suppression of market repair and rebound, but under the subjective will of the enterprise, the release of the supply side or will be effectively controlled. It is expected that in 2024, the veterinary drug API market will show a "low before high" trend, the first half of the market will be mainly repaired, the shock bottom, the second half of the year with the gradual recovery of the farming industry, the recovery of demand, the market is expected to usher in a rebound.