Benzenamine Prices (Q4 2021)
During the final quarter of 2021, the Asia-Pacific region's market witnessed varying sentiments from different countries. Prices in China rose in the third quarter, owing to strong demand from downstream industries such as synthetic dyes, agrochemicals, PU foams, and so on. Furthermore, the strong price of the raw material benzene aided the pricing trend of benzenamine. As a result, FOB Qingdao prices in December were estimated to be 1655 USD/MT. In India, benzenamine market sentiments remained bearish, and prices fell significantly as a result of ample supplies and lower buying momentum from downstream producers. As a result, Ex-Mumbai prices fell to 2025.45 USD/MT from 2132.16 USD/MT from October to December.
Throughout the European region, prices increased in the fourth quarter of 2021. Strong feedstock benzene values owing to dynamic feedstock crude oil fundamentals supported benzenamine prices in this time period. Furthermore, the price increase was prompted by strong demand from downstream MDI producers. Moreover, many local producers were forced to reduce production levels due to acute energy crises, which resulted in supply constraints and, as a result, fumed chemical prices in this quarter.
Prices in the United States experienced mixed sentiments in the final quarter of 2021 as the demand outlook changed. In October, the price appeared to be on the rise, buoyed by strong demand and limited supply. The high prices of feedstock benzene pushed up the price of benzene. Prices fell relatively in November as freight costs fell and availability improved. However, the fundamentals of the chemical recovered in December after receiving strong demand from downstream industries such as MDI and due to crude oil price volatility.
Benzenamine Prices (Q1-Q3 2021)
Despite feedstock chemical supply constraints, the Asian market saw stable demand from the domestic downstream sector in the first quarter of 2021. Prices increased aggressively in the Chinese market due to lower stock levels following the Lunar holidays and strong demand from downstream MDI and ink producers, resulting in a 64% increase in average FOB prices during the quarter, which finally settled at 2013.34 USD/MT at the end of March. Similarly, in the Indian market, benzene scarcity and a lack of Chinese supply drove prices up 5.8 percent from January to March, aided by higher crude oil prices.
The Asian market for benzenamine was dull, with demand fundamentals remaining tight throughout the second quarter. Despite the continuous decrease in benzenamine prices in China, traders remained concerned, as prices were still 120% higher year on year. Some temporary shutdowns and plant restarts, such as Dongying Huatai and Jinling Dongying, reduced stock levels. Traders were wary of the sudden increase in pandemic cases in India, which hampered demand from both China and the domestic market. During this time period, producers in India operated at 30% to 40% capacity due to weak demand fundamentals. As a result of the effective decrease, benzenamine prices in India and China hovered around 2113 USD/MT and 1640 USD/MT, respectively, at the end of May.
Prices of benzenamine in the Asian market skyrocketed during the third quarter due to an increase in the price of feedstock benzene. Another factor that aided the rise was the congestion on several Chinese ports as a result of the closure of Ningbo port, the world's third busiest port, due to the zero-tolerance coronavirus policy, which caused a disruption in the supply chain. Several countries that import benzenamine from China, including India, the United States, Japan, Hungary, and Belgium, experienced a proliferative trend in benzenamine prices during the quarter. Prices for benzenamine ex-Mumbai increased by 210.52 USD/MT from July to September, eventually settling at 2194.99 USD/MT in September.
Strong demand from downstream MDI producers, combined with a critical shortage of feedstock chemicals, caused prices to rise in Q1 2021. Due to a lack of supply from the US Gulf Coast to the global market, European producers were forced to increase their exports to other continents such as Asia. The congested nature of trade routes, combined with high freight costs, aided in the effective rise of benzenamine prices throughout the region.
Prices rose significantly in Europe during the second quarter of 2021, as demand from both the domestic and international markets remained strong. Benzene had an impact on the prices of several downstream products, including benzenamine, which in turn had an impact on the US market.
In Q3 2021, the benzenamine market outlook saw an exponential rise in pricing, backed by a reduction in manufacturing rates by several sectors due to the energy crisis. Furthermore, demand for benzenamine from downstream sectors remained strong throughout this timeframe.
During the first quarter of 2021, the North American market for the chemical experienced a rare cold snap, which halted production across Texas. The prolonged supply constraint of feedstock chemicals, including benzenamine, since Q4 2020 received another boost from this extreme weather disruption, which supported its average prices and led to an 8.75 percent increase within the quarter, taking it to 1400 USD/MT levels by March-end. During this time, the majority of downstream MDI manufacturing plants were shut down due to weather conditions. Covestro declared force majeure on its MDI plant, as well as other production units in Florida, Louisiana, and Mississippi, reducing demand for the chemical across the region and preventing further price increases.
Prices remained dynamic in the second quarter of 2021, as downstream producer demand remained high in the first half of the quarter but gradually decreased in the second half. In terms of demand, the automotive sector demonstrated strong sentiments during the quarter, which increased demand for benzenamine derivatives in the United States. However, reduced automotive production due to material supply constraints impacted its demand in the second half. As a result, after gaining traction in the previous quarter, prices fell in June and settled at 1350 USD/MT in Texas, USA. Furthermore, increased production activities in the Gulf of Mexico effectively contributed to this decrease, as the supply of feedstock benzene increased significantly.
Because of the scarcity of feedstock benzene in the third quarter of 2021, prices continued to rise. By the end of August, Ida's landfall had caused most manufacturing plants and petrochemical refineries to remain closed for nearly two weeks due to power outages along the United States' Gulf Coast. It not only hampered the manufacturing process, but it also disrupted the supply chain, resulting in a scarcity of the chemical and its downstream products. As a result of the hurricane, PBF Energy shut down its benzene facility, and Rubican shut down its benzenamine and MDI manufacturing units in Louisiana.
Benzenamine Prices Overview 2020
Asia's demand surpassed Q2 levels in the third quarter, owing to strong demand for methylene diphenyl diisocyanate (MDI), which was a major contributor to improved margins. Since mid-June, the Chinese benzenamine plant's operating levels had been high, owing to increased buying sentiments. Strong recovery in the PU foams sector, which is used in furniture and appliances, was observed, with many Southeast Asian manufacturers ramping up production in anticipation of the holiday season. Throughout the third quarter, demand from the pharmaceutical industry in India remained strong, with several market players receiving import orders from the United States.
As the second wave of COVID-19 hit the European Union in the third quarter of 2020, the market remained under pressure. As the economy struggled with the economic downturn, demand for the chemical from the downstream sectors of automotive and construction remained muted. The pricing curve remained firm as several reports of downstream MDI plant turnarounds in the region pushed the demand side even further. Production outages at several automotive plants also had an impact on its consumption. Borsod Chem reported in the third quarter that production at its new 200 KTPA benzenamine plant in Hungary would begin by the same time the following year.
Domestic demand experienced a sharp rebound, led by a strong increase in PU demand from the construction and automotive sectors, which had been in the doldrums during the second quarter of 2020 as the US maintained the strictest coronavirus-related economic activity restrictions. End-use markets experienced supply constraints as a result of logistical disruptions and plant closures caused by Hurricane Laura in several US provinces. Consumption by MDI producers rebounded sharply, with higher sales figures reported from sectors such as consumer durables and home appliances.
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