Major producers of penicillin industrial salt reached an agreement at the 58th China International API Convention held on May 17 in Nanjing to cap the price of penicillin industrial salt at CNY 135 to CNY 140/BOU (US$17.6 to US$18.2/BOU).
The move is made by major producers to avoid potential pitfalls with customers, especially Indian companies. India currently purchases 70% of China’s penicillin industrial salt output, and high prices may force Indian companies to begin their own production of the product again. Rising prices are caused by falling supply due to new environmental protection requirements on API producers which both increased costs and forced some producers to suspend production.
However, one major producer, Huaxing Pharma, did not participate in this agreement, and an official of the company expressed doubt about the feasibility of such an agreement.
Seeing rising prices, some former producers such as Sichuan Pharma and Jiangshan Dongfeng Pharma began to revive their production of this product. When supply increases, prices are expected to fall again.
However, in the short term, short supply may continue to drive up prices. The final outcome of the price cap agreement between major producers is unpredictable, according to local analysts.
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