Aniline demand looking dull in major cities of India; buyers in wait and watch position – 9 Jan 2015

Traders from the Mumbai market told the website, “Demand of Aniline is poor in the market and is not expected to rise till the end of January.” Traders have had ample stocks with them but due to dull demand there are no off takes of the chemical. Aniline traded at around Rs. 100-104 per kg of Imported Intact drum (Exclusive of Excise and Vat).

Aniline demand followed the same trend in Hyderabad market and marketeers are purchasing the chemical on need basis only. Aniline sold at around Rs 110-112 per kg of Domestic Intact drum packaging (Exclusive of Excise and Vat).

Demand is worst in Delhi market and there has been absolutely no buying from the end user markets. Chemical traded at around Rs 131-135 per kg in Delhi market of Imported repack packaging (Exclusive of Vat only). The trend followed in Kolkata market as well. Here, the whole solvent industry has been facing instability for quite some time. Aniline sold at around 120-125 per kg in the market of Imported Intact drum packaging (Exclusive of Vat).

Though, there has been some demand in the Ahmedabad market. Here, the traders showed some interest in buying Aniline during the last couple of weeks. Aniline traded at around Rs.85 per kg for Imported repack (Exclusive of Excise and Vat)

An official from GNFC told the website, “Demand for Aniline is moderate but it is not as good as we expected, due to downward trend and unstability in the international market.” Prevailing booking price of Aniline is around $ 800 per metric ton. After taking inputs from different traders form different markets in India, Indianpetrochem.com assimilated that demand may rise at the end of February or in the beginning of March2015.

Following a sharp fall in the price of Brent crude oil, which was last trading below $50 a barrel for the first time since May 2009, prices of derivatives like chemicals and solvents have also taken a hit. Phenol prices in the domestic market have tumbled badly. The rapid decline in ex-tank prices of phenol at Kandla, the local market benchmark, means that importer's trading losses are deepening every day. The prices of phenol tumbled to Rs.61-62/kg ex-tank Kandla on 8th January, 2015, from Rs.83-84/kg ex-tank Kandla in the week ended 5th December, 2014. The prices were at Rs96-97/kg ex-tank Kandla in mid-November.

Demand from end-users in the downstream segment has also slowed in response to falling prices. Phenol has several uses, plywood makers use phenol to laminate wood with paper design. It is also used in Phenolic resins and by pesticides makers. Industries that use these commodities are now incurring losses as they are being forced to sell finished products at lower prices. Several plywood makers have phenol stocks bought at higher prices. They are also facing the brunt of low demand due to a slump in the housing sector.

Phenol producers are cutting capacity as demand has stagnated due to volatile prices. Consumers are worried because of the sharp fall and are now waiting for prices to stabilize. Importers have made losses due to low margins, but expect that they will have a chance to recover losses once the prices stabilize