Excess supply of Aniline declines the import costs in the US market
Excess supply of Aniline declines the import costs in the US market

Excess supply of Aniline declines the import costs in the US market

  • 23-Jan-2024 2:07 PM
  • Journalist: Harold Finch

In the second half of the first month of 2024, the Aniline price trend shifted as import costs witnessed a reduction of almost 5% in the country amid an increase in inventory levels due to improved supply chain activities and reduced offtakes from downstream industries. The heavy rainfall increased the water levels of the Panama Canal and improved shipping activities. Simultaneously, the demand for Aniline was sluggish, and market sources indicated that the USA manufacturing sector Purchasing Manager’s Index decreased in December 2023 and remained below 50 points amidst a deacceleration in new orders from the buyers and a consequent decline in the industrial production rates. The demand for Polyurethane slightly cooled in the Automotive industries due to production halts of gas vehicles amid new regulations in the region. Consequently, the orders for Aniline were depressing from the Methylene Diphenyl Diisocyanate producers due to reduced consumption rates in the end-user Polyurethane segment.

Furthermore, in the second week of January 2024, Aniline producers in China decreased their quotations noticeably by 7.6% as the previous decreases in the feedstock Benzene costs reduced the upstream cost support. Moreover, the recent decline in feedstock Nitric Acid due to a reduction in upstream Ammonia prices amid weak demand from agrochemical industries and a reduction in thermal coal prices negatively impacted the production costs of Aniline.

However, before this shift, in the prime week of 2024, the Aniline quotations escalated by 4.2% in the USA amid inadequate availability of supplies and a surge in the US freight costs. The supplies remained short in the market as the production rates were affected in the producing country amid inadequate availability of feedstock and upstream supplies in the Asian region due to shipping delays and a rise in supply chain concerns. The Houthi Rebels in Yemen attacked the vessels in the Red Sea, causing an increase in ship traffic and commercial vessels rerouted to the Cape of Good Hope. It resulted in a slight delay in upstream Crude Oil supplies in the Asian region. Simultaneously, orders were firm from dyestuff makers as the market sentiments showcased some improvement from the regional clothing fibre industries due to an increase in the regional retail sector sales index by 8.8% on a month-on-month basis in the concluding month of last year.

At the end of the third week of January 2024, the import quotations for Aniline CFR Texas in the US hovered at USD 1645/MT.

As per the estimation, the Aniline prices will decline again towards the end of the month due to adequate availability of supplies in the international markets and sluggish consumption in the end-user industries.

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