Supply-Demand and Cost Resonance Drive Aniline to New Annual High

Introduction: Shandong Jinling’s scheduled maintenance is set to take effect soon, and Shanxi Tianji and Jilin Xuyang Kangnai’er also have shutdown plans for October. The market anticipates tight supply in late September and early-to-mid October. Coupled with strong restocking demand for pure benzene at month-end, prices have risen. Tight supply and robust cost support are jointly driving aniline prices to new year-to-date highs.

At the beginning of the week, expectations of US-Iran diplomatic contacts eased concerns over crude oil supply, leading to a consecutive drop in international oil prices. This significantly weakened cost support, causing sentiment in the pure benzene market to turn cautious and prices to fall sharply. As market focus shifted to end-of-month port contract deliveries, concentrated short-covering boosted market sentiment. Additionally, with inventory levels at major East China ports remaining persistently low and subsequent arrivals scarce, the tight spot resource situation remained unchanged. Consequently, East China pure benzene spot prices continued to rise. Resources from the Shandong market were smoothly arbitrated into East China, rising in tandem to provide linked support. However, this rally was not driven by rigid demand; the market largely reflected speculative or "phantom" demand. Later in the week, rebounding crude oil prices supported further increases in spot prices, widening the divergence between near-term and distant forward prices.

The aniline market continued to climb under the dual resonance of cost and demand, with transaction centers reaching new year-to-date highs. On the supply side, only one small unit underwent maintenance during this period, resulting in limited losses. However, Jinling’s maintenance is imminent at month-end. Most sellers maintained low inventory levels, with limited quantities available for external sale and no pressure to ship out, keeping the spot circulation tight. On the demand side, with the Mid-Autumn Festival and National Day holidays approaching, downstream restocking began gradually. Combined with stable MDI demand and rigid procurement needs for additives, market negotiation atmosphere improved significantly compared to previous periods, making low-priced resources hard to find. Regarding costs, pure benzene maintained its strength, with high bidding prices from northern plants providing solid cost support for aniline, prompting seller factories to push prices higher accordingly.

In terms of price transmission along the industrial chain, geopolitical conflicts kept crude oil firm. Coupled with pure benzene inventories at major ports dropping to four-year lows and concentrated pre-holiday restocking by downstream sectors, pure benzene surged, driving aniline strongly upward. Aniline itself faced spot shortages due to unit maintenance and favorable export conditions. High cost pressures transmitted to rubber auxiliaries, where accelerators and anti-oxidants followed suit in price increases due to raw material hikes and production restrictions leading to tight supply. In contrast, polymerized MDI saw prices decline slightly as previously maintained units resumed operations, increasing supply, while downstream demand from home appliances and construction remained weak.

Table 1: Aniline Industrial Chain Price Comparison (Unit: CNY/ton)

It is worth noting that the price spread between the two aniline regions has returned to 120 CNY/ton, indicating nationwide tightness in supply and solid price support. The smaller percentage increase in anti-oxidants and accelerators compared to aniline suggests poor transmission of high prices to downstream sectors, exacerbating pressure on end-users.

Table 2: Domestic Aniline Unit Maintenance Schedule

Regarding units, there were minimal changes in domestic spot supply. The market is focusing more on the significant reduction expected in October, actively preparing for next month's demand.

Supply Side: Concentrated Maintenance Leading to Tight Spot Supply. Jinling Dawang’s single 30,000-ton unit will be shut down from September 20–28. Jinling New Materials’ two 100,000-ton units are scheduled for maintenance at month-end. Shanxi Tianji and Jilin Xuyang Kangnai’er have additional maintenance arrangements for October. The loss of spot supply due to unit shutdowns in October will increase significantly, potentially suppressing industry operating rates and spot circulation volumes. Note that Sinopec Nanjing Chemical Industry’s Zhangzhou 300,000-ton aniline project is planned to start up in October, which will partially offset the new losses. However, during the phase of concentrated maintenance execution, overall supply remains tight, giving producers strong confidence to hold prices.

Demand Side: Holiday Restocking is the Core Variable. If MDI and accelerator/anti-oxidant sectors resume purchasing after the holidays, demand expectations remain relatively optimistic. Conversely, if tire manufacturers reduce production, the upside potential for aniline prices will be limited.

Cost Side: Solid Support. Pure benzene is estimated to maintain its strength in October, and the aniline-benzene spread is expected to narrow.

Overall Outlook: With both supply-demand dynamics and costs showing strong performance for aniline, prices are expected to continue climbing toward 14,500–15,000 CNY/ton.