Aniline Market Continues Upward Trend as Supply Contraction Drives Prices

Lead-in: Multiple units in northern China are undergoing maintenance, with only Dongying Caijin operating normally, intensifying the tight spot supply landscape. Although downstream acceptance of high prices is limited, rigid demand replenishment persists, keeping factory inventories at low levels. As expectations for the return of units from maintenance in the next cycle strengthen, market sentiment is mixed between bullish and bearish views. Without new positive drivers, the upside potential for prices remains limited.

Affected by recurring geopolitical tensions in the Middle East and support from high crude oil prices, spot prices were initially firm. However, as the geopolitical premium gradually unwound and downstream resistance emerged, the price center shifted downward. On the supply side, some refineries maintained defensive load reductions due to raw material constraints, but previously shut-down units returned sequentially, leading to a month-on-month recovery in overall operating rates. Import arrivals provided some replenishment; although port inventories remained at low levels, the pace of destocking slowed. Key downstream products showed strong resistance to high-priced raw materials, with procurement primarily driven by rigid demand, while expectations of reduced demand suppressed the market. Overall, the combined weakening of cost support and demand led to fluctuating downward movement in pure benzene prices this week.

The aniline market exhibited a "tight supply, rising prices" trend. On the supply side, concentrated shutdowns of northern units continued to tighten circulation volumes, serving as the core driver for the bullish rally. However, demand-side performance was weak, with downstream buyers mostly purchasing on an as-needed basis and showing insufficient willingness to chase highs. Although pure benzene costs remained high, their impact on aniline prices diminished due to healthy profit margins.

It is important to note that aniline and its downstream sectors typically lag behind in passing on raw material price increases, requiring more time for end-user industries to absorb upstream cost hikes.

Table 1: Weekly Domestic Aniline Supply Data Comparison (Unit: Yuan/ton)

Regarding domestic aniline supply, multiple large-scale units underwent maintenance in October, reducing spot supply by 32,000 tons, which was the core driver for the recent upward trend in the aniline market. Weekly data shows that non-integrated unit production dropped by 23.76% week-on-week. Tight spot availability and high-level fluctuations in pure benzene guided aniline strength.

In terms of demand, no maintenance plans have been announced by domestic downstream users currently, indicating stable internal demand. Therefore, with reduced supply and stable demand, the aniline market is expected to continue surging.

Table 2: Domestic Aniline Unit Maintenance Schedule

However, caution is warranted. As units return from maintenance, the commodity volume of domestic aniline will increase significantly. Procurement rhythms at auxiliary factories are expected to slow down, increasing the risk of a pullback from current high levels.

Next Period Forecast:

• Supply Side: Although previously shut-down units have restart plans, the progress of some enterprises' resumption of operations is below expectations. The actual increase in supply needs real-time verification, and the degree of relief in tight sourcing remains to be observed.
• Demand Side: Downstream demand continues to be weak, dominated by rigid procurement. Resistance to high-priced raw materials has not dissipated, leaving the demand side with insufficient support.
• Cost Side: The short-squeeze logic for pure benzene at the end of the month is still playing out. Strong cost-side support limits the downside space for aniline prices.

Conclusion: Driven by costs and supply uncertainties, the aniline market is expected to maintain a stable-to-strong trend, with a price range of 16,500–16,700 Yuan/ton.