Neomycin Sulphate Prices Set to Surge Globally Amidst Supply Challenges and Increased Demand

Neomycin Sulphate prices are expected to rise globally in June due to several factors. Increased demand from end-consumers, supply chain disruptions, and limited market availability are primary contributors. Additionally, efforts by market participants to replenish their inventories have sustained high demand, further driving up Neomycin Sulphate prices.

Recent data reveals an unexpected slowdown in China's manufacturing sector in May, as the official Purchasing Managers' Index (PMI) fell to 49.5 from April's 50.4, according to the National Bureau of Statistics (NBS). This slowdown has led to a constrained supply within the domestic market relative to the prevailing demand, potentially driving up Neomycin Sulphate prices.

In India, the growth rate in the manufacturing sector has also decelerated due to reduced working hours amid an intense heatwave, negatively impacting production volumes. This reduction in production could limit the supply of Neomycin Sulphate and consequently elevate its prices.

India's pharmaceutical exports in May increased by 10.45% to $2,301.88 million compared to $2,084.06 million in the same period the previous fiscal year. This growth, driven by rising demand from overseas markets, suggests a positive trend and supports the potential rise in Neomycin Sulphate prices.

Since China and India are major exporters of Active Pharmaceutical Ingredients (APIs), a similar trend is likely to be observed in Western markets for Neomycin Sulphate.

Beginning in June, the cost of shipping goods to Europe and the US will rise as shipping companies impose surcharges to compensate for the increased expenses of rerouting ships via the Cape of Good Hope. Hapag Lloyd, a leading German shipping firm, will enforce a Peak Season Surcharge (PSS) of $1,000 per container for shipments originating from India and West Asia to the North American West Coast. Similarly, shipments from India to the US East Coast and Gulf Coast will incur a PSS of $500 per container. These additional charges will be reflected in higher product prices for consumers, contributing to the upward trend in Neomycin Sulphate prices.

Additionally, in 2024, the peak shipping season is starting earlier than usual due to several factors. These include retailers restocking after strong sales, attempting to get ahead of increased tariffs on goods from China set to take effect in August, and ensuring sufficient inventories for the holiday season amid strong consumer demand. These factors could also contribute to the rise in Neomycin Sulphate prices.

According to ChemAnalyst, the prices of Neomycin Sulphate are expected to continue rising in the coming months. This projection is attributed to the anticipated global relaxation of monetary policies, which is likely to stimulate demand across various end-user industries. Additionally, an uptick in trading activity could further strengthen the Neomycin Sulphate market.