Paracetamol API prices rose in August 2023: These are the stocks to keep on radar

Today, it’s nearly impossible to find a household where the members have not used Paracetamol tablets at one point or another.

In August 2023, there was a significant rise in the prices of the key ingredients used to make Paracetamol, which is a widely used pain and fever relief medication. This increase in costs has left pharmaceutical companies and healthcare experts confused. Paracetamol API, also known as Acetaminophen, is an essential ingredient in many different medicines.

There are several reasons why the price of Paracetamol API has gone up. One of the main reasons is disruptions in the supply chain. Problems with shipping and getting the raw materials needed have caused issues throughout the industry, making it harder to produce important pharmaceutical ingredients like Paracetamol API.

China, a major player in pharmaceutical production, is crucial for making Paracetamol API. However, disruptions in importing raw materials and shortages in China have affected the production of Paracetamol API. This has led to higher costs and lower production, causing Paracetamol API prices to rise.

The key raw material, acetic anhydride, is also more expensive due to a tight supply in China. Some Chinese companies, like Yankuang Lunan and Jiangsu Sopu, had temporary production stops due to unexpected issues.

The significant rise in worldwide demand, including in the US market, has created considerable stress on the pharmaceutical supply chain, including Chinese manufacturers. They are working hard to meet these increasing demands. However, producers of Paracetamol API are facing challenges such as limited production capacity and disruptions in the supply chain.

Analysts expect that the global Paracetamol API prices are expected to increase in the future. This is because the costs of raw materials are increasing, partly due to higher energy prices. Also, the growing demand from other industries will add to the tight market conditions, making the price of Paracetamol API continue to rise.

The following are the leading Indian players engaged in the manufacturing of Paracetamol API, who can benefit from this price spike:

Based on the data above, we can see that Aurobindo Pharma and IOL Chemicals and Pharmaceuticals has garnered satisfactory returns, while Divi’s Lab and Granules India have remained stagnant, depicting a mixed outlook in the past year. Nevertheless, they could become direct beneficiaries if the issues are not resolved soon.

According to the management of Granules India, they are the largest global manufacturer of paracetamol with a 30% market share, they anticipate that their share will increase to 50% in the future.

Investors must keep these stocks on their radar.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.