European Aniline Market Sees Downturn as Buyer Interest Wanes, Prices Fall

In February 2024, the Aniline prices witnessed a decrease of 4.6% in Germany. The demand for Aniline was moderate from the downstream industries. As per the sources, in February 2024, the Eurozone's Manufacturing Purchasing Manager's Index declined marginally compared to the previous month and remained below 50, indicating a deceleration in manufacturing sector activities. The textile industry witnessed a slowdown in February 2024 amid the rise in raw material costs and ample availability of previous stocks, which suppressed the demand for Aniline from dye manufacturers. On the other hand, the Aniline orders were consistent from MDI industries to produce Polyurethane components in the Polyurethane segment as the construction sector saw a rise in outlook due to hopes of rate cuts. At the same time, the automotive industry witnessed a surge in demand for Methylene Diphenyl Diisocyanate amid the rise in the production of electric vehicles and the need for lightweight PU materials made from MDI. On the other hand, the wood furniture sector faced a decline in demand for PU foam and PU key component MDI owing to reduced production caused by the extended lead times in procuring raw materials.

The availability of Aniline stocks was ample in the market due to the affliction in supplies to international buyers and the increased inventory levels in the regional market amid a decline in new orders from regional end-user buyers and production rates in the downstream industries during the month. At the same time, the cost support on Aniline declined on feedstock Nitric Acid amid ample availability of stocks and a decline in production costs due to a reduction in upstream Ammonia prices attributed to low demand from agrochemical industries. At the same time, Aniline demand was low from the downstream industries due to the hike in production costs, as the European energy industry is at odds over energy security amid the US LNG export pause. It raised the variable costs of production. On the other hand, the cost support was firm from feedstock Benzene as its production rates faced affliction due to an escalation in upstream Brent Crude Oil prices. The availability of Crude Oil stocks is low in the global market due to production cuts by OPEC+ and rising anticipations of further Oil production cuts by OPEC+ after the cease-fire in the Israel-Hamas War.

At the end of February 2024, the Aniline FD Antwerp quotations witnessed USD 1387/MT in Belgium.

As per the assessment, the Aniline price trend will continue to showcase bearish sentiments in the European region towards the end of the quarter. The suppliers may reduce their quotations amid adequate availability of supplies in the regional market. Additionally, the production costs of Aniline will decline further due to the anticipated decrease in feedstock Nitric Acid costs.