Aniline Price to Stay high on Tight Supply and Healthy Demand
China’s aniline market has encountered fiercer supply crunch since H2 August, and the price of feedstock benzene has rebounded at the same time, boosting aniline prices to hit a new high in the year. It is expected that the aniline market to stay strong in the short term backed by continuous supply tightness.
China’s aniline price has entered the upward trend since late August. As of October 14, the prevailing negotiation price in North China was in the range of RMB 14,120-14,220/mt, and the average price was RMB 14,170/mt, up RMB 4,170/mt or 41.7% from August 23. With the approach of peak demand season, downstream replenishment demand picked up in September. In addition, the market expected a supply short in the future market as many aniline producers would take maintenance in October, so the downstream purchase turned more active. What’s more, the feedstock benzene price was also in an upward trend in September and early October, which gave wings to the rise in aniline prices.
In September, China’s aniline production changed little compared with that in the same period of last year. However, considering the extensive downstream replenishment before the Mid-Autumn day and National Day holiday, as well as the demand growth brought by the rise in MDI and antioxidant prices, aniline market saw supply shortages. In October, SCI predicts that the aniline production will be around 200kt, a decline of 50kt M-O-M. Yantai Wanhua Chemical and Shanxi Tianji Coal Chemical have taken maintenance, and Jiangsu Fuqiang Chemical and Shandong Dongying Huatai Chemical also have maintenance plans, which will buoy the continuous rise in aniline prices. The supply tightness will be gradually eased in November with the restart of overhauled units, which may weigh down aniline prices.
Oct China Aniline Enterprise Turnaround
Robust export in H2 2022 may exacerbate supply tightness.
Since 2022, industrial costs in Europe have risen notably on the back of international energy crisis and inflation pressure, thus the overseas demand for Chinese-origin aniline has increased. According to the data released by General Administration of Customs, China exported a total of 217.9kt aniline from January to August 2022, a Y-O-Y increase of 28.86%. And with high oil prices, China’s aniline export is expected to remain robust in the fourth quarter of 2022, which will lead to severer domestic supply crunch.
Downstream demand is expected to gain.
Since September, the demand from downstream MDI and antioxidant producers has been moderate, and the prices of the two have shown a significant rising trend. Underpinned by this, the aniline market was active. Moreover, the stark increase in natural gas in Europe has supported the price of local polymeric MDI to rise sharply, which also buoyed the Chinese aniline market.
Aniline and Downstream Products Price Comparison
Firm benzene price lends strong cost support for the aniline market.
China’s benzene prices ushered in a round of rebound in September despite increasing arrival of imported goods, which was mainly due to robust downstream demand approaching holidays. As of October 12, the transaction price of oil-based benzene in East China was RMB 7,800/mt. But with the retreat in crude oil prices, benzene prices also moved down. Boosted by the strong demand in North China as well as tight supply, the downward trend of benzene prices was not obvious. Therefore, the slight decline in the benzene price has limited impact on the aniline market.
To sum up, aniline price may stay at a high level in October, supported by tight supply and firm cost.
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