October Nitro Chlorobenzene Supply to Be Ample, Prices Expected to Remain Subdued in Asia

In the recent week, the cost of Nitro Chlorobenzene continued its declining pattern in the Asian markets due to the weak demand from the downstream industries. Nitro Chlorobenzene supply in October continued to remain on the higher end of dynamics as more capacities in China, South Korea came online to cater for Autumn festivities need while the global shipping companies continue to keep their prices up for deliveries from India and other South Asian nations due to geopolitical tensions in the Western Indian Ocean region. Prices have therefore been relatively weaker and fell marginally in August while September observed turnaround in prices due to logistical situation easing for shipping and more ships diverted towards Asia as US-East coast undergoes severe hurricane season. Driven by logistical improvement, spot benzene prices weakening and moderate demand in NE Asia, Nitro Chlorobenzene prices subdued due to weaker demand pressure.

As per the latest data available, p-Nitro Chlorobenzene supply in NE Asia, CIF Korea’s import growth declined by 29.7%. In absolute terms, p-Nitro Chlorobenzene and their derivatives saw their export growth to 564 tons for a month in the latest series of data revealed by Korea. The gap between import and exports dropped from 1756 tons to 328 tons, YoY comparison revealed. Latent capacities in 2023 came online which led to fall in imports by 50% YoY basis. Nitro Chlorobenzene feedstock pricing analysis showed that FOB Seoul Benzene deliveries observed 17% YoY cost pressure assessed on 30th August 2024, while the supply did improve significantly in Korean markets. Gains in cost pressure coupled with weaker output prices have kept Korean producers under tightened conditions. The latest assessment of prices CIF values from Korea revealed that as domestic production ramped up, CIF NE Asia prices dropped by 35.7% than their 2023 prices. From the data, it has been clear that overcapacities in Nitro Chlorobenzene supply persists. Another factor has been weaker recovery of demand. Major consumers of p-Nitro Chlorobenzene produced in NE Asia have been dyes and pigments, agrochemicals as well as pharmaceutical companies. Pharma demand seasonally improved in Q3 which was offset by weak dyes as well as agrochemical segment. Amongst the two, agrochemical segment gained volumes YoY basis due to higher rainfall and increased planned acreage this monsoon. South Asian Nitro Chlorobenzene markets saw major disruption in prices due to logistical challenges in Western India due to monsoon in Q3 supported by elevated demand in Indian markets. As freight availability improved, more suppliers from China were procured. Latest series of data revealed that 14.3% YoY growth in imports of p-Nitro Chlorobenzene was observed in India, driven primarily by Agrochemicals and dyes. Dyes demand subdued in Indian markets due to economic slowdown observed in India.

Apparel demand and subsequently dyes consumption is estimated to drop, according to clothing manufacturers association of India (CMAI). Similar trends were observed in NE Asia. P-Nitro Chlorobenzene and other prices have been estimated to drop further till 2025. Financial developments from various producers for Q3 performance have yet to be released, while trade flows and other developments favor volume gains at the cost of lower prices.