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Drägerwerk's US ventilator worries already evident in March

Medical ventilator manufacturer Drägerwerk AG & Co. KGaA sees the potential for a significant shortfall between the demand for ventilators and supplies globally, the Financial Times reported.

CEO Stefan Dräger said "the largest part of production capacity for ventilators is in Europe, while the biggest problem appears to be in the U.S."

As outlined in Panjiva's research of March 20, the potential shortage of medical equipment and supplies has led the U.S. government to activate the Defense Procurement Act to allow the government to prioritize purchases either from overseas or domestically.

The first use of the act has come from the issuance of an order to General Motors Co. by the White House, but Dräger is "skeptical" of attempts to have a wide range of industrial companies attempt to ramp up production of ventilators.

Panjiva data shows that Drägerwerk may already have started deliveries to the U.S. as early as the 2019 third quarter. There were 59 shipments linked to the company in 2020 through March 26; the same level as in the 2019 fourth quarter. However, so far, the shipments have focused on components rather than finished machines.

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As could be expected, total U.S. seaborne imports of completed ventilator systems have slumped in the first three weeks of March. Total imports fell 33.5% year over year and were 39.7% below the average run-rate for the fourth quarter. Shipments from China slumped by 84.7% in the March-versus-fourth-quarter comparison, which was not offset by a 30.4% surge in shipments from Singapore.

Shipments from the rest of the world also dropped 59.4% and could decline further given the export restrictions being applied globally, unless the recently agreed G-20 pact to not apply such rules is abided by.

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Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.