Bearish Benzene, Thin Demand Pressurize Aniline Market; Agrochemicals Offer Hope”

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.