Rising costs coupled with a significant reduction in supply are expected to drive aniline prices higher after the holiday.

Introduction: Before the National Day holiday, the aniline market trended strongly upward. Driven by continued price increases in upstream pure benzene towards the end of the month and steady demand, aniline sales were robust, pushing prices to their highest levels of the year. Looking ahead to the post-holiday period, pure benzene trends and supply-side unit changes are the core variables. However, significant resistance from downstream industries to follow high prices may limit further gains in aniline.

As the month-end delivery window approaches, port inventories have remained at extremely low levels. The concentrated covering of short positions triggered a sharp rise in spot prices; however, far-month futures contracts showed weak follow-through. By late October, the spread between futures and spot prices widened to over 1,500 yuan/ton, indicating clear lack of confidence in the sustainability of high prices. While the stalemate in US-Iran tensions continues to support oil prices, geopolitical premiums remain volatile. On the downstream side, the squeeze on profits caused by high raw material costs has become apparent, with losses widening for key products such as styrene and caprolactam. The willingness to chase higher prices is low, creating a stark contrast between weak real demand and tight spot supply. Overall, this week’s market movement was essentially driven by delivery mechanisms locking traders into specific time windows rather than a fundamental tightening of supply and demand. As deliveries conclude, the contradiction between recovering supply and weak demand will gradually dominate the market.

From the perspective of aniline supply, Shandong Jinling’s shutdown for maintenance has been implemented, and subsequent maintenance plans for Shanxi Tianji and Jilin Xuyang Kangnai'er have been finalized, exacerbating concerns about tight spot availability and fostering a bullish sentiment. Demand performance is divergent: although some tire manufacturers plan to reduce loads or shut down during the National Day holiday, major downstream additive factories are operating relatively stably, so domestic demand has not collapsed significantly. In contrast, export markets are suppressed by high domestic prices, leading to stagnant negotiations for new orders. Regarding cost logic, strong raw material pure benzene breaking through its annual highs provides solid bottom support for aniline.

In terms of price transmission along the industrial chain, profits are shifting upstream, with aniline rising in tandem with raw materials. Some downstream products (such as polymerized MDI) face pressure due to poor cost pass-through, while certain additives (such as anti-aging agents) have achieved stronger price increases due to their own tight supply-demand balance.

Table 1: Aniline Industrial Chain Price Comparison (Unit: Yuan/Ton)

It is worth noting that the stable price gap between aniline in different regions indicates nationwide tightness in supply, providing firm price support. The fact that some anti-aging agents and accelerators rose more than aniline suggests this is related to their own supply-demand dynamics, while also reflecting passive following of aniline's price increase.

Table 2: Domestic Aniline Unit Maintenance Schedule

Regarding units, multiple large-scale facilities are undergoing maintenance in October, leading to a significant reduction in spot supply. Meanwhile, no maintenance plans have been announced by domestic downstream industries, keeping internal demand basically stable. Therefore, amid a substantial drop in supply, the tight spot situation for aniline intensifies, supporting strong price surges.

The change in the supply-demand gap over the next three months depends primarily on variations in supply and export volumes. There is a clear expectation of reduced domestic spot supply in October. The progress of newly commissioned units remains unclear, resulting in lower estimated values for October. Under the backdrop of strong domestic demand and exports, the supply-demand gap in October may turn negative. As maintenance units restart and new units produce qualified products for the market, domestic aniline spot supply and demand will be restructured, putting pressure on spot supply; thus, November is assigned a weaker outlook. In December, with synchronized maintenance across upstream and downstream units and lower-priced aniline becoming more competitive, the supply-demand gap is expected to return to negative territory.