Aniline Market Faces Bearish Trend in Europe and USA Amidst Surplus Inventories

The Aniline prices remained bearish in the international market and decreased noticeably in Europe and the US market during June 2023.

In Europe, the Aniline inventories were excessively available in the market, while the offtakes were below anticipation during the period amid the hike in Bank interest rates. It negatively impacted the buyer's enthusiasm and made them cautious. Orders were depressing from the downstream Methylene Diphenyl Diisocyanate and rubber producers. Simultaneously, the Eurozone manufacturing Purchasing Manager's index dropped again during June 2023 and remained below 50, indicating further contraction in manufacturing activities.

Simultaneously, the expenses involved in producing Aniline were reduced due to a decline in the costs of its feedstock, Benzene, attributed to higher inventory levels and earlier drops in upstream Naphtha prices. Additionally, the demand from downstream industries was suppressed amid the unpredictability of Crude Oil prices. This resulted in a contraction of Aniline's production costs. Concurrently, the feedstock Nitric Acid prices fell further during the month because of dampened demand and a contraction in the upstream costs.

Meanwhile, the recent rebound in Dutch TTF Natural Gas futures raised the variable costs of Aniline's production costs.

In the US market, the Aniline prices were firm initially, and exporters raised their quotations amid an increase in container freight costs. However, during the mid-month, the Normalisation in freight costs amid the strengthening of the US Dollar reduced the import prices of Aniline.

In mid-June, the Aniline demand was low from the Pharma sector and dye industries. At the concluding week of H2 of 2023, the buyer's orders were moderately low due to sluggish manufacturing activities in the end-user Polyurethane industries. The stocks were sufficiently available while purchasing activities were stable to low from purchasers.

As per the sources, the Aniline prices in Europe decreased by almost 14% in Germany, and the import prices of Aniline in the USA decreased by 6% during June 2023. At the end of H1 of 2023, the Aniline FD Hamburg discussions witnessed USD 1560/MT and Aniline CFR Texas at USD 1630/MT.

As per the ChemAnalyst, Aniline prices may decline further in the European and North American markets. The reason is the availability of adequate inventory levels and stable to low offtakes from Pharmaceutical and dye makers. Simultaneously, the surplus availability of Methylene Diphenyl Diisocyanate components in the market will further suppress the demand from Polyurethane producers. Consequently, the decrease in upstream Crude Oil prices will reduce production costs.