In February 2025, the Aniline market showcased a bearish trend in the European region, with a consistent price decline throughout the month. The Aniline inventory levels increased in the international market post reopening of China’s market after the Lunar New Year holidays. The downstream industries show limited interest and transactions remained low amid a lack of market activities. Simultaneously demand remained sluggish, which resulted in negative cost pressure on Aniline prices.

Key Takeaways:

• Increase in Aniline inventory levels in the international market after the reopening of China’s market.
• Rise in crude oil prices and supply disruptions hampered the feedstock benzene availability and disrupted Aniline productions.
• Severe weather and labor strikes at European ports caused delays, raising freight costs.
• Low transactions in downstream industries kept demand sluggish and Aniline producers could not pass on higher costs due to weak demand.

At the same time, crude oil prices increased during the month amidst geopolitical tensions, like U.S. sanctions on Iran and export restrictions. These disruptions in the supply chain resulted in tighter availability of Aniline key feedstock benzene. Despite rising raw material costs, Aniline producers were not able to pass these price increases on to the customers due to the sluggish demand, which further complicated the efforts to stabilize the market.

Meanwhile, severe weather conditions and labor strikes caused disruptions and hampered the port activities. Strike at Rotterdam port and Le Havre port caused congestion and longer waiting time for the vessels. Shipping companies had to reroute these vessels around the Cape of Good Hope to avoid the affected areas, and complex delivery schedules. Simultaneously, storms and flooding led to port closures and delays. Businesses were facing the challenge of navigating these port issues to ensure smooth supplies to the regional market.

Concurrently, the demand for Aniline used in MDI industries for producing polyurethane materials for the automotive and construction sectors remains weak in during the month. In Belgium, new car sales in the automotive sector declined by 8.1% year-on-year in February and reached 40,161 units. Simultaneously, the European construction sector continued to decline, though at a slower rate. High inflation, rise in material costs and increase in interest rates resulted in lower demand, especially in the residential sector, where new building permits saw a significant drop.

The Aniline prices would likely continue the bearish trend in the upcoming weeks. Rising feedstock prices will raise the upstream cost support and production costs, but the lack of demand would strangle the market to recover in the short term. Overall, February 2025 was a tough month for the Aniline market, with prices continuing to drop and limited signs of recovery towards the end of Q1, 2025.