The logic behind drug price hikes is terrifyingly powerful.

Chip prices are rising, oil prices are surging, and metal prices are soaring, driving extreme bullish runs in their respective industry sectors. Pharmaceuticals are also experiencing price increases, and their strength is equally formidable.

Oil is the mother of chemical raw materials and the lifeblood of industry. The recent conflicts in the US, Israel, and Iran have caused a spike in oil prices, which has also triggered a wave of raw material price hikes in the domestic pharmaceutical industry, reflecting China’s supply chain resilience and robust infrastructure capabilities.

The increase in oil prices is transmitting its impact across various aspects of the pharmaceutical sector—factory gate glove prices are rising, vitamin prices are soaring, penicillin prices are climbing, and leading companies in each niche are showing aggressive upward trends. Who hasn’t seen their prices go up yet?

Currently, from the trend perspective, the leading vitamin companies are the strongest, with the most solid logic.

01

Vitamin prices are soaring, Xinhecheng reaches a trillion-yuan market cap

Since the Venezuela incident, Xinhecheng’s stock price has increased nearly 40% over about two months, and since the US-Israel conflict, it has risen nearly 20%.

Vitamins (such as Vitamin A, Vitamin E, etc.) are mostly derived from petroleum-based raw materials like isoprene, phenol, and others.

Xinhecheng is an absolute leader in the global vitamin industry. By the end of 2024, its annual production capacity for Vitamin A, Vitamin E, and Vitamin C will be 8,000 tons, 60,000 tons, and 45,000 tons respectively, ranking second, first, and third worldwide.

Similarly, methionine production depends on raw materials like methanol, propylene, and sulfur—products derived from oil or natural gas chemical systems, with prices highly correlated to international oil prices.

Xinhecheng’s solid methionine annual capacity is 300,000 tons (with an additional 70,000 tons/year at the Shandong base planned), and its 180,000-ton liquid methionine project was launched last year, making it the third-largest globally.

“Vitamin + methionine” accounts for the majority of the company’s nutritional product revenue. In the first half of 2025, the nutritional segment contributed 64.86% of total revenue.

Taking vitamin varieties as an example, the reason behind Xinhecheng’s strong stock performance is essentially a “double hit” of “price increases + changes in competitive landscape.”

Most core vitamin varieties were at their lowest prices in the past five years in the second half of 2025, with Vitamin E, which is most sensitive to oil prices (due to longer synthesis pathways and raw materials closely linked to oil, high CR5 concentration, and historical low prices), leading the surge. Xinhecheng has the world’s top capacity, and Vitamin A and C prices have also followed suit.

(图源：中泰医药、Wind)

This round of vitamin price increases is cost-driven. Comparing the vitamin price surge of 2024-2025, there are similarities but also fundamental differences.

In July 2024, an explosion at BASF’s Ludwigshafen plant caused a shutdown of VA and VE capacities, which were 8,000 and 20,000 tons per year, accounting for 22.22% and 14.81% of global capacity. The explosion caused a sudden tightening of global vitamin supply, with some short-term supply disruptions pushing prices sharply higher—Vitamin D3’s largest increase exceeded 1,000%. The plant’s VA production was delayed until April 2025, and VE until July 2025, ending that cycle of vitamin price increases.

This round of vitamin price hikes is driven by upstream cost increases, with major producers in Europe and the US obtaining higher-cost petroleum-derived raw materials, improving domestic production competitiveness. The price increase closely follows oil prices (timeline aligned with Middle East conflicts). However, based on current price increases across varieties, the rise seems less than in 2024, leaving room for further increases as the situation evolves.

02

Disposable gloves: after risk clearance, a sweet spot emerges

The disposable glove industry is also at a point of industry clearing and rising key raw materials driven by oil prices. For example, the core raw materials for nitrile gloves—butadiene and acrylonitrile—are derived from petroleum cracking; PVC glove raw materials—vinyl chloride—also come from oil; polyethylene glove raw materials are closely linked to international oil prices.

Taking the more demand-growth and higher-line requirements nitrile glove segment as an example, raw materials account for about 40%-45% of costs, with nitrile latex making up over 90% of raw material costs (butadiene to acrylonitrile ratio approximately 6:4). Energy costs account for 15%-20% (varying by region, mainly coal and natural gas), with the rest covering labor, depreciation, and amortization.

According to Open Source Pharma, the prices of butadiene and acrylonitrile have increased by 84.43% and 45% respectively since the end of 2025, raising glove production costs by about $3.5-$4 per box. The factory gate price is expected to rise from $15.5-$16 to over $19 per box.

Beyond the industry-wide cost-driven price increases fueled by oil prices, domestic leading manufacturers of disposable gloves are also gaining market share through advantages in energy structure and capacity utilization, which influence the competitive landscape.

From the outbreak of COVID-19 (2020-2021) to 2025, the industry experienced demand surges (supply less than demand), demand declines (supply exceeds demand), channel inventory digestion, capacity clearing, and price stabilization.

For example, in 2024, nitrile glove capacity utilization first recovered to 55%-60%, with PVC gloves around 40%. In 2025, nitrile glove capacity utilization fluctuated significantly due to tariffs affecting US imports from Southeast Asia. As domestic manufacturers increased non-US customer share and US-China tariffs eased, capacity utilization stabilized again.

(图源：隆众资讯)

After supply-demand balance is restored, the industry will return to a stable period, with demand for nitrile gloves increasing, leading to price hikes and profit recovery. The main competition is between domestic manufacturers and Southeast Asian producers. Before the pandemic, domestic companies held less than 30% of the global market share but have rapidly expanded, surpassing 40% in 2025, while Southeast Asian capacity additions remain limited.

Additionally, domestic firms are continuously innovating to reduce production costs (e.g., automation), further strengthening cost advantages. Meanwhile, older Southeast Asian plants need higher prices to operate profitably.

(图源：平安证券)

Domestic manufacturers’ cost advantages are strengthening, and export unit prices have shown signs of bottoming out since Q3 2025.

(图源：平安证券)

Furthermore, the energy cost differences between Chinese and Southeast Asian glove manufacturers are notable. For example, Yinge Medical mainly uses clean coal, while top glove companies like Top Glove rely heavily on natural gas. According to Open Source Pharma, domestic coal costs about $4.17 per MBTU, while Malaysian natural gas costs around $8 per MBTU.

Yinge has increased its self-supply of nitrile latex in recent years, while Southeast Asian companies may face rising import freight costs for nitrile latex, further widening the cost gap and impacting profit margins.

Listing recent trends of three domestic manufacturers, their performance remains aggressive.

03

Stagnant varieties—Calcium Pantothenate?

After analyzing two strong-price increase varieties, are there any that lag behind? Quite a few, and calcium pantothenate (Vitamin B5) might be one.

Similarly, the price of calcium pantothenate is highly influenced by oil prices, as its production relies heavily on chemical raw materials like isobutyraldehyde, formaldehyde, and propionaldehyde. Since 2026, the absolute price increase has been modest—from early-year 35-38 yuan/kg to 40-44 yuan/kg on March 13—an increase of about 15%.

In the past week, major manufacturers have stopped reporting and signing, a typical signal of coordinated price support.

From the supply perspective, over 80% of calcium pantothenate supply comes from Chinese companies, including Yifan Pharma and Brothers Technology, with Yifan Pharma holding 8,000 tons of capacity, ranking first globally.

The advantage of domestic-led global supply is that if Chinese manufacturers form a price alliance and support prices collectively, the price increase can be very sharp. On the other hand, the lack of strong overseas capacity means less market demand transfer from other competitors, which has a smaller impact—mainly driven by the previous logic of collective price support.

What about the previous cycle of calcium pantothenate price increases and their sustainability?

In the first half of 2021, due to environmental regulations and low prices in previous years, many small factories exited, pushing prices down to 60-75 yuan/kg. In December 2021, major manufacturers collectively stopped reporting and signing, pushing prices upward, peaking above 400 yuan/kg in May 2022.

Currently, prices of 40-44 yuan/kg have significant potential, with major manufacturers ceasing reporting and signing, combined with rising costs, indicating we may be at the start of a new calcium pantothenate price increase cycle.

However, the sustainability of this cycle for leading company Yifan Pharma’s market value remains uncertain. Whether this trend can sustain will be observed.

Conclusion: The logic of price increases in the pharmaceutical sector can be very aggressive—it’s all about whether investors can keenly sense and seize this wave of alpha.