Bearish Benzene, Thin Demand Pressurize Aniline Market; Agrochemicals Offer Hope”
Domestic producer GNFC reduced Aniline prices by ₹6/kg to ₹117.50/kg (Ex-Bharuch), prompting importers to cut rates by ₹3.5/kg. Prices reflect falling Nitrobenzene costs and weak demand from dye and pigment sectors. Supply remains steady with ample inventories, but downstream segments show sluggish activity. Experts expect prices to stay under pressure, recommending buyers to leverage dips amid potential volatility from feedstock or demand changes.
Key Takeaways
- Aniline Price Cuts: GNFC cut Aniline prices to ₹117.50/kg; importers lowered theirs to ₹113/kg on 60-day credit.
- Supply & Inventory: Domestic production steady; port inventories ample, maintaining comfortable supply conditions.
- Weak Downstream Demand: Sluggish demand from Acetanilide, Methyl Aniline, and PCONA due to weak dye and pigment sectors.
- Agrochemical Support: Strong demand for Ortho Nitro Aniline and 2,4-Dinitro Aniline driven by fungicide and pesticide manufacturing.
- Market Outlook: Prices expected to stay subdued near term; buyers advised to build inventories ahead of possible price swings.
Chemical Price: GNFC and Importers Cut Aniline Prices
- Domestic producer GNFC reduced Aniline prices by ₹6/kg, now quoting ₹117.50/kg (Ex-Bharuch) on advance payment terms.
- In response, importers lowered prices by ₹3.5/kg to ₹113/kg (Ex-Kandla) on 60-day credit terms. Trader-level offers remained mixed, hovering in the ₹112–113/kg range (Ex-Kandla, 60-day terms).
- The price drop is largely driven by falling feedstock Nitrobenzene prices, amid soft global benzene trends.
- Asian Benchmark – FOB Korea Benzene
a. 1H June: $706/MT (↓ $4)
b. 2H June: $706/MT (↓ $4)
c. 1H July: $704/MT (↓ $4)
d. 2H July: $704/MT (↓ $4)
Chemical Supply & Demand: Domestic Production Steady but Demand Weak
- Supply conditions remain comfortable with steady domestic production and ample inventories at ports.
- However, demand continues to underperform, especially from downstream segments like:
1. Acetanilide
2. Mono Methyl Aniline
3. Nitro Methyl Aniline - Demand from Para Chloro Ortho Nitro Aniline (PCONA) is weak due to sluggish Azo dye and pigment production.
- On the brighter side, demand for Ortho Nitro Aniline and 2,4-Dinitro Aniline remains strong, supported by healthy fungicide and pesticide manufacturing.
India’s monthly Aniline demand stands at ~28,000 tonnes, with:
1. Domestic production (GNFC + Luna): ~7,000 tonnes
2. Imports dependency: ~21,000 tonnes
- Low feedstock costs, rising imports, and subdued dye & pigment demand continue to weigh on prices. However, seasonal agrochemical demand is expected to provide short-term support.
Chemical Market news: Stable Benzene Benchmarks
- WTI crude oil prices edged up by 0.53%, settling at $64.91 per barrel, reflecting moderate strength in global energy markets.
- Natural gas prices, on the other hand, dipped by 1.68% to $3.72 per MMBtu, indicating a softening in short-term demand.
- FOB Korea Benzene prices held steady in the range of $706–707 per metric tonne, tracking global crude oil movement.
- FOB China Aniline prices were assessed at ¥7125 per metric tonne, showing subdued momentum in regional trade activity.
Expert Opinion: Aniline Prices Expected to Stay Soft
- Aniline prices are likely to remain under pressure in the near term, driven by:
1. Weak downstream offtake
2. Ample supply
3. Bearish feedstock Benzene - Nonetheless, the agrochemical sector could act as a buffer, supporting prices if seasonal demand strengthens.
- Buyers should capitalize on price dips to build inventories, as any upturn in Benzene or downstream revival could trigger short-term price volatility.