Although the haze of the new crown epidemic in 2021 still exists, consumption is gradually picking up with the arrival of spring. Driven by the rebound in crude oil, the domestic chemical market ushered in a bull market. At the same time, the aniline market also ushered in a bright moment. As of the end of March, the market price of aniline reached 13,500 yuan/ton, the highest level since 2008.

　　 In addition to the positive cost side, the aniline market rise this time is also supported by the supply and demand side. The volume of new installations fell short of expectations. At the same time, the main installations were overhauled, coupled with the expansion of downstream MDI, the demand side was strong, and the aniline market was rising. At the end of the quarter, the speculative sentiment cooled down, most of the commodities peaked and the aniline maintenance device was about to restart, and the market turned around and fell, which is expected to return to rationality.

　　 As of the end of 2020, my country’s total aniline production capacity is approximately 3.38 million tons, accounting for 44% of the global production capacity. The oversupply of the aniline industry, coupled with environmental restrictions, has relatively narrowed the supply in the past two years. There will be no new additions in 2020, but driven by the growth of downstream MDI production capacity, aniline will usher in another expansion in 2021. Jiangsu Fuqiang’s 100,000-ton new plant was put into operation in January this year, and Yantai Wanhua’s 540,000-ton new plant is also scheduled to be put into operation this year. At the same time, Fujian Wanhua’s 360,000-ton plant has started construction and is scheduled to be put into operation in 2022. By then, China’s total aniline production capacity will reach 4.3 million tons, and Wanhua Chemical will also become the world’s largest aniline producer with a production capacity of 2 million tons.

　　 The downstream application of aniline is relatively narrow. 80% of aniline is used for the production of MDI, 15% is used in the rubber additives industry, and the others are used in the fields of dyes, medicines and pesticides. According to chemical online statistics, from 2021 to 2023, MDI will have an increase of nearly 2 million tons of production capacity and will digest 1.5 million tons of aniline production capacity. Rubber additives are mainly used in the production of tires and are further connected to the automobile market. In the post-epidemic era, both automobiles and tires have rebounded to a certain extent. It is expected that the demand for rubber additives will increase relatively. However, in September 2020, the European Union declared aniline to be a category 2 carcinogen and a category 2 teratogen, and it is recommended to restrict its use in some toys. At the same time, many clothing brands have also included aniline in the restricted substance list in recent years. As consumers’ requirements for environmental protection and health increase, the downstream part of aniline will be subject to certain restrictions.

　　In terms of import and export, my country is a net exporter of aniline. In recent years, the export volume has accounted for about 8% of the annual output. However, the export volume in the past two years has shown a downward trend year after year. In addition to the increase in domestic demand, the new crown epidemic, additional tariffs imposed by the United States, and Indian anti-dumping are the main reasons for the decline in aniline exports. Customs data shows that exports in 2020 will be 158,000 tons, a year-on-year decrease of 21%. The main exporting countries include Hungary, India and Spain. Wanhua Bosu has an MDI device in Hungary, and there is a certain demand for domestic aniline. However, the Bosu plant plans to expand the capacity of aniline this year, and the domestic aniline export volume will further decline by then.

In general, the sharp rise in the aniline market was driven by multiple benefits in terms of cost and supply and demand. In the short term, the market has risen too sharply and risks falling at any time; in the long run, the downstream is supported by high MDI demand , The market will be optimistic in the next 1-2 years. However, with the strengthening of domestic environmental protection and the completion of the integration of aniline-MDI, the living space of some factories will be squeezed, and the industrial concentration is expected to further increase.