Nitro Chlorobenzene prices since the month of September have been rallying due to the aggressive seasonal procurement strategy undertaken by China in the global market on the back of cooling off energy and cost pressures. Along with rising prices, Chinese capacity utilization continues to improve to cater to demand gradually. Recently, the Chinese groundbreaking ceremony of UPL agrochemical plant in Jiangsu province is a testimony to the strategy adopted.

Prices observed in Asia Pacific increased by a tune of 34% and traded FOB Qingdao USD 1240/MT in the last week of October 2023. The bullish price trend in China is coupled with the rise observed in similar intermediates in the chemical market, like Nitrobenzene, o-nitrotoluene, etc. Market analysts and experts identified that the major demand surge for para-Nitro Chlorobenzene can be attributed to the surge in demand for agrochemical intermediates. Previously, the January-May harvest of wheat in China declined by 1% Y-o-Y basis in FY22-23, alarming the government to undertake protective measures. In an inquiry with an Indian market participant, it was revealed that Nitro Chlorobenzene prices continue to rally as the Chinese continue to stock up their inventories in case of an eventuality. Agrochemical prices across the globe shot up the roof as the Chinese procurement strategy raised the input Nitro Chlorobenzene, Nitrobenzene, and o-nitrotoluene prices.

In European and American markets, prices of Nitro Chlorobenzene shot up due to cost pressure implied by Chinese force majeure on raw materials. An expert reported that Northern Europe continues to face high climate uncertainties as rainfall and storms were observed in October, which has pulled down the temperature and demand for heating oil significantly earlier than expected. Gas prices shot up beyond USD 50/MWh, increasing further cost pressure in the European markets, which will be reflected in the prices in the coming weeks. In the southern Mediterranean Europe of Spain, Portugal, and Italy, major demand for Nitro Chlorobenzene agrochemicals is being observed while there is a drop in demand in the Northern regions as acreage area declined. Europe is also largely dependent on imports of Nitro Chlorobenzene for raw materials especially from China, which is currently inducing high cost pressure on Agrochemical value chains.

ChemAnalyst forecasts a further rise in prices of Nitro Chlorobenzene in the coming weeks since the sales of agrochemicals depend on the seasonal cycle with variation depending upon demand situation across the globe with longer cost pressure persistence in European markets to continue. Due to strong market dynamics, Asia can expect cooling off prices earlier than Europe and North America. Improvement in Chinese demand is also going to affect the price pressures on Nitro Chlorobenzene in the coming weeks.