Grim Market Outlook for Nitro Chloro Benzene Amid Weak Demand and Adequate Supply
- 10-Mar-2025 8:00 PM
- Journalist: Rene Swann
Throughout February and early March 2025, the prices of Nitro Chloro benzene (NCB) have remained stable. This trend was due to continued balanced supply-demand market conditions. Further, the NCB’s feedstock benzene and chlorine prices remained steady. Manufacturers were operating at stable rates post-lunar year which led to adequate supply in the market. In addition, demand from the agrochemical and dyes sector remained sluggish. Meantime, the demand from the pharma sector saw growth, thus maintaining adequate demand to match the supply leading to stability in the prices of NCB in China.
The production cost has remained on the lower side with coal being a major energy source in China. Its prices declined amid oversupply issues in the market. Furthermore, the demand for coal has been on the decline with lower steel manufacturing (Steel being one of the top consumers of coal) due to the US tariff on steel by newly elected President Donald Trump. The lower prices of Coal, feedstock Benzene, and Chlorine combined have led to lower production costs of NCB. Thus, leading to Subdued market performance of commodity.
NCB utility in a wide range of applications such as dyestuff, rubber chemicals, as an intermediate in pigments, agrochemicals intermediates including pesticides. NCB’s downstream demand is linked to consumer sentiment as the Consumer prices index in February fell short of expectations in China. Leading to product downstream demand is currently fall short. Consumer sentiment fell at the sharpest pace in a long time, with producer price deflation persisting, as there was cautious spending amid job and income worries. Furthermore, as Beijing faces escalating trade wars with the US, the Chinese government has promised to boost consumption but there is highly likely the deflationary pressure to carry on in the upcoming months. The consumer price index (CPI) fell last month from a year before, reversing January's increase, data from the National Bureau of Statistics (NBS) showed. As exports from China may decline from the trade war, fiscal policy needs to become more proactive, noting that China's NCB downstream sector also continues to struggle.
As per the ChemAnalyst Database, the prices of NCB in March are expected to remain subdued due to lower downstream and upstream market performance. In addition, during post lunar year holiday, the manufacturer has raised production rates to match the supply with demand leading to adequate supply. Furthermore, as deflation continues to pose a challenge in the market consumer sentiments remain bearish. Moreover, the trade war with the US has created a pessimistic market environment in China. Thus, the NCB market future looms in the dim for the upcoming month.