European Aniline Prices Slump in July 2023 Amid High Inventory and Lower Consumption

In the European region, the Aniline prices witnessed an almost 5% drop in July 2023 due to the firm availability of previous stocks in the market and a reduction in offtakes from the buyers due to a decline in consumption rates from the downstream buyers.

For the past several months, the Eurozone's manufacturing Purchasing Manager's Index has been on a steady downward trajectory, signaling ongoing shrinkage in manufacturing sector operations. The demand for Aniline was sluggish from the downstream Methylene Diphenyl Diisocyanate producers due to average activities in Polyurethane industries amid moderately low orders from the construction sector and electronic appliances manufacturers. Simultaneously, orders were depressing from dye manufacturers due to weak activities in the textile industries.

At the same time, the production costs of Aniline also decreased during the month. The decrease in the feedstock Benzene costs amid oversupplies due to low consumption from downstream manufacturers reduced the upstream cost support. Simultaneously, the feedstock Nitric Acid prices declined due to the reduction in upstream Dutch TTF Natural Gas costs. As of July 24, more than 82% of European gas storage facilities were filled, a situation brought about by increased Norwegian gas flow, lower demand, and heightened natural gas exports from the United Kingdom. This surge in UK exports was largely due to consistently high wind-power generation in the first half of July.

Conclusively, the Aniline prices in the Netherlands witnessed USD 1538/MT at the end of July 2023, as per the ChemAnlayst data sources.

Similarly, during June 2023, Aniline prices fell noticeably by almost 14% in the region due to excess availability of inventories amid softened global demand from end-users. The available inventory levels were high due to destocking practices by manufacturers. At the same time, the hike in bank interest rates by the European Central Bank during the month made the buyers conscious while making purchases, and they avoided any unnecessary trading activities. Consequently, it reduced orders and offtakes of Aniline from downstream Methylene Diphenyl Diisocyanate producers amid sluggish activities in the end user Polyurethane industries. Simultaneously, Aniline inquiries from dye manufacturers dampened amid declined demand from textile industries.

At the same time, Aniline production costs fell as the feedstock Benzene prices declined amid volatile upstream Crude Oil prices and sluggish demand from downstream buyers. Simultaneously, feedstock Nitric acid prices contracted further during the month amid depressed demand from agrochemical consumers and producers. Simultaneously, the decline in input costs due to decreased Natural Gas prices amid subdued demand and high inventories eased the cost support on Aniline.

As per the estimation, "Aniline price trend will improve in the upcoming weeks as the demand may escalate from the Methylene Diphenyl Diisocyanate producers due to anticipated improvements in Polyurethane foam demand from the manufacturing and Automotive sector towards the end of Q3."