FLORFENICOL 2022, A Pressed Spring - Market price review

We export veterinary APIs and vitamins and have followed the market trends of Chinese products for many years. Today I will briefly review the situation for florfenicol.

In 2022, florfenicol market prices fell from a high level, with ups and downs during the year and overall weakness throughout the year. From January to April, the florfenicol price fell off a cliff from the highest point of the year and then entered a phase of oscillation at low level. In December, the prices went again straight down, and mid to late December fell to a new low point.

(I'm indicating RMB yuan prices here because for export prices, we must take into account fluctuating exchange rates, as well as country market characteristics, it’s a little more complicated).

From January to April, the price of florfenicol continued to decline, falling by about 25%, with the highest point of the year appearing in early January at 580 yuan/kg. In 2021, due to environmental protection and "double control" policies, the average price had once reached as high as 735 yuan/kg, a record high.

When such policy-related supports are gone, the prices subsequently begin to fall. In addition, the downturn in farming, low demand and manufacturers' price cuts also played roles in pulling down the prices.

From May to November, the florfenicol price bounced from the bottom and tumbled for quite a few months. The average market price hovered and oscillated between 450-470yuan/kg. It was mainly a game between supply and demand, and there were no factors that led to significant price fluctuations, and the market could be described as relatively calm.

Entering December, with the liberalization of epidemic prevention and control, the recovery of logistics, the end-year selling for performance and funds return, the middle and upper stream of supply reduced prices aiming for the elimination of inventory. However, the market confidence needs to be improved; the downstream purchasing enthusiasm is dull, terminal demand is just demand-oriented, and traders are more cautious about wait and see.

The imbalance between supply and demand made the price of florfenicol fall straight down and hit a new low for the year, with a low of 430 yuan/kg.

Florfenicol market weakness in the year 2022 was mainly due to the negative impact of cost, surplus supply and low demand. The current average price of florfenicol has been low since 2018, and there is little room for future downward movement. From the supply point of view, although there is new production capacity put into operation, which has suppressed long-term price predictions to some extent, the increase in new production capacity is limited in the short term. The product supply will mostly stay the same for a while. From the demand, since the second quarter of 2022, the revenue and profits of the breeding industry have shown a sustained recovery trend, the prosperity circle of downstream pig and chicken farming is expected to lengthen, and demand-drive is expected to continue to recover.

In summary, under the conditions of cost support, stable supply and recovering demand, in 2023 florfenicol market prices are estimated to leave the current bottom and move upward. The time should be in mid-May and continue until the end of October.

We supply veterinary APIs to the global market and have been tracking the market for a few years of some major API products, including vitamins, and publish a monthly e-newsletter on the subject.

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