Nitro Benzene prices eased in June 2024 by a meagre 2% M-o-M basis owing to higher output and lower spot trades to South Asia and Europe owing to freight charges surging as high as USD 6000 to USD 8000/TEU. The situation has further triggered the conversion of Nitro Benzene to Aniline downstream at higher pace subsequently easing the price pressure through the entire value chain till Methylene Diphenyl Isocyanate. The situation in June also saw upstream price pressure remain stronger as benzene prices largely remained stable yet elevated over May prices by 6%. With Nitro Benzene and its derivatives prices remaining lower in June, ChemAnalyst predicts further easing and partially stabilizing prices for the next two months.

Nitro Benzene prices in China saw stability since April partially due to lower production through its major plants as capacities remained excess in the market. May saw rising prices for Methylene Diphenyl Diisocyanate (MDI) as freight as well as crude prices surged to record high reaching USD 91/barrel Brent basis, a 10% MoM increase over the April prices due to geopolitical tensions in Middle East. The situation triggered a price movement of Benzene as well as other feedstock lagging behind the crude prices in China by two weeks including benzene. Nitric Acid as well as other raw material prices also eased at spot levels in May 2024 owing to lower demand for Nitro based fertilizers especially India, China etc. due to higher inventories and increase in domestic capacities for Indian markets. This easing of prices in Nitric acid eased price pressure on Nitro Benzene. The companies in China have been largely remained offline due to political pressures of the West to keep the prices stable.

By the end of May and early June, MDI prices surged 2% triggering higher demand for Aniline and subsequently Nitro Benzene, although Benzene prices remained high, easing of Nitric and sulfuric acid kept the prices stable, while extending lower discounts to overseas deliveries due to shipping issues. This situation remained as it is for the next two weeks of June, with freight charges touching as high as USD 8000/TEU for European as well as MEA deliveries, demand for Nitro Benzene and their derivatives eased with European domestic capacities coming online due to lower gas prices. This situation in June led to oversupply of Nitro Benzene and downstream derivatives. Subsequently domestic production of Nitro Benzene did not ease in June as the markets prepared for higher demand situation in the coming months with interest rates easing in Europe and North America. Chinese markets have been prioritizing US bound deliveries of finished polymers before August 1 when higher tariffs on Chinese products get implemented.

ChemAnalyst assessed that prices are expected to ease further despite deteriorating margins as Chinese and other Asian market participants have been converting Nitro Benzene to Aniline and other derivatives for production of dyes, agrochemicals and PU as stimulus into Chinese economy continues to drive growth beyond 5%.