# Small-molecule APIs: Feedstocks

Why raw materials are nearly 40% of an API maker's costs

Source page: https://www.materialinsights.org/chemicals/apis/feedstocks/

Why raw materials are nearly 40% of an API maker's costs What this tab covers What it is made from and what it feeds: the raw materials and energy per tonne with their share of cost (linked to the commodity table), who is low-cost and why, and the chemicals made from it.

APIs are made from petrochemical aromatics and solvents, plus sugar or starch for fermentation. Feedstock cost is a small share of the value of a patented API but a large share of a generic API. What decides competitiveness is control of KSMs, solvent recovery, scale and cheap power and steam, which is why China's integrated chemical parks undercut stand-alone Indian plants.

#### Inputs per tonne

| Input | Quantity per tonne | Role | Share of cost | Source |
|---|---|---|---|---|
| [Oil Crude oil](https://www.materialinsights.org/energy/crude_oil/) | PMI 168-308 t materials per t API, mostly solvents (indicative) | carbon skeleton and reaction media | raw materials 39.5% of Divi's Q4 FY26 sales | Kekessie et al. 2024 (indicative); BoB Capital (May 2026) |
| **KSMs and intermediates (link: ksm_intermediates)** | 1-3 t per t API depending on route (indicative) | registered starting material | largest single cost for many generics (indicative) | qualitative |
| [Mz Maize](https://www.materialinsights.org/commodities/maize/) | not published | carbon source for microbes | not published | Aurobindo (2024) |
| **Steam and electricity** | steam is the larger share of process energy (Vivar et al. 2025 for paracetamol) | distillation, drying, solvent recovery | not published | Vivar et al. 2025 |

#### Who is low-cost, and why

Chinese producers in integrated parks with captive KSMs and cheap coal-based steam are lowest cost on commodity APIs. Indian makers compete on regulated-market quality, DMF portfolios and labour cost. European and US plants survive on complex, controlled or patented APIs.

#### Raw materials on the commodity table
[Oil Crude oil](https://www.materialinsights.org/energy/crude_oil/)

#### What it is made into

| Product | Note |
|---|---|
| [Exc Pharmaceutical excipients](https://www.materialinsights.org/chemicals/excipients/) | combined with APIs in formulation |

## Other sections

- [Summary](https://www.materialinsights.org/chemicals/apis/index.md)
- [Overview](https://www.materialinsights.org/chemicals/apis/overview/index.md)
- [Correlation](https://www.materialinsights.org/chemicals/apis/correlation/index.md)
- [Production route](https://www.materialinsights.org/chemicals/apis/routes/index.md)
- [Production](https://www.materialinsights.org/chemicals/apis/production/index.md)
- [Cycles](https://www.materialinsights.org/chemicals/apis/cycles/index.md)
- [Trading](https://www.materialinsights.org/chemicals/apis/trading/index.md)
- [Movement](https://www.materialinsights.org/chemicals/apis/movement/index.md)
- [Regulation](https://www.materialinsights.org/chemicals/apis/regulation/index.md)
- [Characteristics](https://www.materialinsights.org/chemicals/apis/characteristics/index.md)
- [Emissions](https://www.materialinsights.org/chemicals/apis/emissions/index.md)
- [Relationships](https://www.materialinsights.org/chemicals/apis/links/index.md)