The Urethane Blog

Chinese Aniline Overview

The oversupply of the aniline industry will ease in the next three years

Echemi 2021-02-18

A few days ago, the first aniline and upstream and downstream industry summit was held in Nanjing. The participating experts analyzed the future trend of the market and believed that the oversupply situation of the aniline industry in the next three years would ease.

Longzhong Consulting analysts said that in recent years, my country’s aniline industry has shown prominent contradictions in oversupply, survival of the fittest, and going overseas. The industry’s operating rate has been maintained at 50% to 70% for a long time.

The main raw materials of aniline are pure benzene and nitric acid. The price of nitric acid is relatively low and its impact on the market is limited. The downstream of aniline mainly includes MDI (diphenylmethane diisocyanate), rubber additives and other products. At present, domestic MDI production enterprises have fully realized the independent production capacity of aniline, and have surplus output on the market.

In recent years, the aniline industry has relied on exports to ease the contradiction of oversupply. From 2016 to 2018, the export volume has increased year by year, and the export volume has declined from 2019 to 2020. The main export destinations are India, the United States, Spain, Hungary and other countries.

Experts predict that in the next three years, the new production capacity of aniline will be mainly concentrated in MDI co-production enterprises, and the expansion of rubber additives will be very small, and the contradiction of oversupply will be eased. The development of the aniline industry still faces two major problems. One is the oversupply, and the other is the single development of downstream products, and the growth point of demand is still on MDI products.

Research on the aniline market must focus on crude oil prices. Longzhong Consulting analysts pointed out that the main factors affecting crude oil prices in 2020 are geopolitics, epidemics, economic demand and inventories. It is a very unstable quadrilateral, and the impact of individual factors cannot be overstated. It is expected that it will take about 100 weeks to fully recover after the international oil price plummet, and the reasonable range is between 55 and 60 US dollars per barrel.

Experts pointed out that because only one set of pure benzene plants was put into operation in Zhejiang Petrochemical in the first half of 2021, and many pure benzene plants were overhauled, the domestic supply of pure benzene would be tight.

In the long run, my country has built seven major petrochemical industrial bases. These projects have relatively high chemical production capacity. The production capacity of pure benzene plants is mostly at the million-ton level. At the same time, due to the misalignment of upstream and downstream production time, the surplus pure benzene may impact the market in the short term.

Experts pointed out that in the context of the transformation and upgrading of my country’s industrial structure, the elimination of backward production capacity and intensive development are the general trend, and the pure benzene industry chain will also be reshaped from the top down. It is expected that in the next two years, the downstream expansion of the pure benzene industry chain will be faster than that of the upstream. However, due to the clearing of downstream backward production capacity and the supplement of foreign pure benzene imports, the domestic pure benzene market is expected to maintain a tight balance.