Insufficient Supplies Surging Aniline Prices in the USA

In the US market, Aniline prices witnessed an increase of 1.2% in August 2024 amid a shift in market demand and insufficient availability of supplies. In the pharma sector, the demand and offtakes of Aniline were consistent. Moderna experienced an 11.5% increase in market capitalization, largely due to the US FDA's approval of its mRNA respiratory syncytial virus (RSV) vaccine, mRESVIA, in May 2024. This approval represents a significant milestone for Moderna, as it is the company's second mRNA product to receive regulatory approval. The boost in market capitalization underscores investor confidence and the growing impact of Moderna's innovative vaccine portfolio in the biotechnology sector. Additionally, in July 2024, the Consumer Price Index (CPI) increased by 0.2% from the previous month and 2.9% compared to last year.

At the same time, the Aniline production rates were moderate at Asian manufacturing units, and the exports were average from the Asian exporters. The Far East Export sub-index experienced a notable increase in July 2024. Simultaneously, the US Imports rose for the second consecutive month in July 2024. At the same time, the cost support eased on Aniline key feedstock Benzene due to a decrease in upstream crude oil prices, driven by reduced transportation activities and a decline in fuel consumption. It negatively impacted Aniline's production costs in the producing country.  According to the ChemAnalyst data sources, the Aniline CFR Texas prices in the USA witnessed USD 1625 at the end of the first half of August 2024.

However, at the start of the month, the orders for Aniline from MDI producers, used in the polyurethane segment, were weak due to reduced consumption of PU materials from the Automotive industries. In July, the automotive sector experienced a 5.1% decline in new vehicle sales compared to June, with 1,275,935 units sold. This represents a 2.9% decrease compared to the same month in the previous year, July 2023. The reduction in sales highlights a notable downturn in the market, suggesting potential shifts in consumer demand or broader economic factors influencing purchasing behaviors. Consequently, Aniline prices witnessed a weekly decrease of almost 2% at the end of the week concluded on 2nd August 2024. Simultaneously, the US Manufacturing PMI dropped slightly below 50 at the beginning of the 2024 third quarter. This decline reflects a slowdown in manufacturing activity and indicates a contraction in output compared to the previous month.

As per the estimation, Aniline prices are expected to remain firm in the North American region, as import quotations are likely to rise due to increased freight charges. Additionally, the supply of Aniline may be affected during the hurricane season. Concurrently, demand for Aniline from MDI manufacturers is anticipated to improve, which could lead market players to raise their prices to increase their profit margins.