Aniline Market Was Stable-to-Dropping (July 14-20, 2017)

This week, aniline market trended flat to drop.

Firstly, with the hot weather, units in rubber additives, Dye and pesticide industries started maintenance. Also, because of safety accident in Shandong Linyi, the environment protection and safety inspections became strict. Part of small-sized factories reduced operating rate or started units maintenance. Secondly, the demand for Aniline entered the off season. As the aniline demand decreased, in traditional way, the aniline factories chose to decrease prices to stimulate selling. However, this was difficult to work for a long time, and decreasing prices will lead to aniline demand overdraft in the future. Therefore, the aniline prices was stable this week.

On July 18, Jinling Group cleared stocks and decreased prices because of units maintenance in Shandong Dawang factory. The quotation in Dawang factory was RMB 7,670/mt by acceptance, which was down RMB 200/mt. The quotation in Shandong Dongying was RMB 7,770/mt by acceptance, which was down RMB 100/mt.

The aniline prices in East China and Shanxi Tianji were stable. The quotation in Shanxi Tianji was RMB 8,070/mt, because of the higher purchasing price and operation cost. With the consuming of high-prices raw material, the quotation in Shanxi Tianji was RMB 7,670/mt, which was down RMB 400/mt and the same as the quotation in Shandong.

The quotation in East China was RMB 8,300/mt, due to few export in Nanjing Chemical. Therefore, the negotiation price of aniline in East China decreased slightly. Up to July 20, the negotiation price of aniline was at the range of RMB 8,100-8,200/mt. Some lower prices were heard to be RMB 8,000/mt.

There was no significant change in aniline export. Export orders in Nanjing Chemical, SP Chemicals and Connell Chemical were standing orders. The products were mainly exported to Korea, India, Europe and America.

This month, Chinese aniline factories changed contracts with MDI factories. Wanhua Chemical purchased goods in SP Chemicals, because of units maintenance in Connell Chemical. When SP Chemicals restarted units, they retailed small amount of aniline. The supply of aniline in East China decreased, which was the reason of for stable prices in East market.

Up to July 20, the market prices in Shandong and North China were at the range of RMB 7,670-8,070/mt. The average price was RMB 7,880/mt by acceptance with self-delivery, which was down 1.67% W-O-W. The aniline market price in East China was at the range of RMB 8,100-8,300/mt. The average price was RMB 8,230/mt by acceptance with self-delivery, which was down 0.96% W-O-W.

Operating Rate

Up to July 20, the Chinese aniline operating rate was 71.41%, which increased slightly from last week. Two 50kt/a units in SP Chemicals restarted on July 15. Also, 180kt/a unit in Connell Chemical underwent maintenance and will restart at the end of July. It is predicted that Chinese aniline operating rate will decrease.

Forecast

The units in Connell Chemical will take overhaul, and the supply of aniline will decrease.The market support will be limited. Furthermore, main factories in Shandong will suffer selling pressures, as the aniline prices in Shandong were close to prices in Shanxi. The aniline prices in Shandong will decrease. Moreover, as the downstream users will show resistance to prices, the aniline market prices will decrease.