Aniline Prices Decline as Feedstock Costs Drop – Will Demand Revive?

Key Highlights

1. Price Drop – Importers reduced Aniline prices to ₹130++/kg, while GNFC holds at ₹136.45++/kg.
2. Weak Demand – Pharmaceuticals, PU foam, and rubber chemicals slowed production, impacting market sentiment.
3. Feedstock Correction – Ammonia and Benzene prices fell by $4/ton and $10/ton, respectively.
4. Market Outlook – Seasonal demand from agrochemicals and PU foam will boost prices starting in April 2025.

Aniline Prices Decline Amid Weak Market Sentiment

• Today, importers have reduced Aniline prices by INR 1/kg, bringing the new rate to INR 130++ per kg (Ex-Kandla) on 60-day payment terms.
• Meanwhile, GNFC, the domestic manufacturer, has kept its offers higher at INR 136.45++ per kg (Ex-Bharuch) on advance payment terms.
• On a week-on-week basis, Aniline prices have declined by INR 2/kg due to weak trade sentiment and sluggish demand in downstream industries.
• The prices of key feedstocks, Ammonia and Benzene, are also undergoing corrections:
  A. FOB Middle East Ammonia (2H Oct 2024): USD 310/ton (down by USD 4)
  B. FOB Korea Benzene (2H Oct 2024): USD 836/ton (down by USD 10)

Falling Demand from Key Sectors Leads to Market Correction

• During January and February 2025, Aniline prices remained elevated due to higher replacement costs and strong demand from the agrochemicals, dyes, and pigments sectors.
• However, in March 2025, demand has weakened as key downstream industries—pharmaceuticals, polyurethane (PU) foam, and rubber chemicals—have reduced production plans. This slowdown, coupled with declining feedstock prices for Benzene and Ammonia, has contributed to the correction in Aniline prices.
• Despite the current softness, sellers anticipate a strong rebound in Aniline prices, as seasonal demand from agrochemicals and PU foam production is expected to pick up from April 2025 onwards.
• India's total monthly demand for Aniline stands at approximately 11,000 tons. Of this, domestic manufacturer GNFC produces about 3,400 tons per month, while the remaining 7,000 tons are met through imports.

Global Oil and Trade Policies Impact Market Dynamics

• The crude oil benchmark (WTI) rose by 0.62%, settling at USD 66.68 per barrel.
• Natural gas prices declined by 2.36%, reaching USD 4.34/MMBtu.
• Additionally, the Directorate General of Trade Remedies (DGTR) has launched an anti-dumping investigation into Aniline imports from China, as per an announcement by the Ministry of Commerce and Industry in September 2024.

Market Outlook: Should Buyers Stock Up Now?

• Expert forecasts that Aniline prices will likely remain mixed this week due to weak downstream demand. The declining future contracts for Benzene and Ammonia are expected to put downward pressure on Aniline prices.
• However, the upcoming seasonal demand from agrochemicals, rubber processing, and PU foam sectors is expected to boost Aniline consumption.
• Buyers are advised to consider inventory-building opportunities during price dips.