In the first quarter, the aniline market fluctuated upward, and the monthly average price gradually increased. Taking the North China market as an example, the lowest point within the quarter appeared in January, with the price at 9550 yuan/ton, and the highest point appeared in March, with the price at 13300 yuan/ton, and the price difference between high and low was 3750 yuan/ton. The main positive factor for the upswing from January to March came from the supply and demand side. On the one hand, in the first quarter, domestic large factories underwent intensive maintenance and the industry inventory was low. On the other hand, the recovery of terminal demand after the Spring Festival produced positive support for the market.

Supply performance continued tight support aniline prices upward

In the first quarter, the aniline market supply performance continues to be tight to push up the price. After New Year’s Day, the downstream pre-holiday stock demand increases, supply and demand side positive, the price began to appear low rebound trend. After the Spring Festival, the overhaul of domestic aniline equipment increased. In February, the domestic aniline industry’s overall on-load was 62.05%, down 15.05 percentage points from January. After entering March, the terminal demand recovered well. Although the industrial load recovered to 74.15%, the supply and demand side still provided obvious support to the market, and the domestic aniline price went up further in March. As of March 31, the mainstream market price of aniline in North China 13250 yuan/ton, compared with 9650 yuan/ton in early January, a cumulative increase of 3600 yuan/ton, an increase of 37.3%.

New downstream capacity releases aniline supply continues to be tight

In the first quarter of 2023, domestic aniline production was about 754,100 tons, increasing by 8.3% quarter-on-quarter and 1.48% year-on-year. Despite the increase in supply, the 400,000-ton/year MDI unit of Wanhua in downstream Fujian Province was put into operation in December 2022, which gradually turned into normal after the first quarter. Meanwhile, the 70,000-ton/year cyclohexylamine unit of Wanhua in Yantai began trial operation in March. After the new production capacity was put into operation, the demand for raw material aniline in downstream increased significantly. Resulting in the first quarter of the overall aniline market is still in tight supply situation, and then have a strong support for the price.

Price shock stronger first quarter aniline industry profits gradually increased

The first quarter aniline profit showed a steady increase trend. From January to March, taking East China as an example, the average gross profit of domestic aniline enterprises was 2,404 yuan/ton, down 20.87% month on month and 21.97% year on year. In the first quarter, due to tight supply in the domestic aniline market, the price was obviously supported by the widening price gap with downstream products, and the industry profit was gradually repaired synchronously. As the domestic and export market demand for aniline in the first quarter and the fourth quarter of 2022 was good, the industry profit increased greatly. Therefore, the profit of aniline in the first quarter of 2023 declined on a sequential basis.

Domestic demand increased and exports shrank in the first quarter

According to customs data and Zhuo Chuang information estimates, the cumulative domestic aniline export in the first quarter of 2023 is expected to be around 40,000 tons, or down 1.3% from the previous quarter, or down 53.97% year-on-year. Although domestic aniline production maintained an increasing trend in the first quarter, the export of aniline in the first quarter may show a slight decline from the previous quarter due to the obvious increase in domestic demand and no obvious advantage in export market price. Compared with the first quarter of 2022, due to the obvious increase of raw materials in Europe in the first quarter of 2022, the cost pressure of local aniline producers increased, and the import demand of aniline products from China increased significantly. Under the obvious advantage of export price, domestic aniline producers were more inclined to export. With the release of new downstream production capacity in China, the tight supply trend of domestic spot resources of aniline will be more obvious. It is expected that the export market in the second quarter may still maintain a relatively low level with limited supply.

The second quarter expected weak range shock operation

In the second quarter, aniline market is expected to oscillate. In late March aniline price reached a stage high, the downstream received goods conflict, the market high risk increased in April began to high rapid decline trend. In the short and medium term, the aniline unit has gradually resumed production and is running close to full load, and the market supply side tends to be loose. Although Huatai plans to carry out inspection and repair in April, Fuqiang and Jinling plan to carry out inspection and repair in May, after May, the terminal tire industry enters the off-season, which significantly reduces the demand for rubber auxiliaries downstream of aniline, and the supply and demand side of aniline market will gradually weaken. From the trend of raw materials, although the price of pure benzene and nitric acid is still relatively strong, but because the current aniline industry profit is still relatively rich, so the cost side of the positive boost or limited. In general, in the second quarter, under the background of weak supply and demand, the domestic aniline market may run the whole range of oscillations.