Global Nitrobenzene Prices Hold Steady Amidst Economic Factors and OPEC+ Production Cut Impacts

Global Nitrobenzene prices stabilized in August and remained within a tolerable limit in September 2023. Prices in the Asia-Pacific market, especially China, in August 2023 were assessed at FOB Shanghai USD 1063 per ton. The trend remained similar in the European and American markets to a large extent, with minor fluctuations caused by local macroeconomic factors. Nitrobenzene is a chemical intermediary that produces rubber, pharmaceuticals, dyes, and plastics.

In American markets, the prices of Benzene remained stable, and a gradual bullish trend over a longer period was observed over two months in August 2023. Multiple vendor inquiries in the business of benzene supply chain alluded to the rising energy and crude cost despite the US producing over 12.37 million barrels/day in the given month. The nitric and sulfuric acid nitrate charge also contributed to the rising supply cost. The demand side showed positive responses from pharmaceuticals, automobile, and construction industries. Inventories of Nitrobenzene are maintained significantly to cater to the demand of the downstream industries. Import performance from China and India remained strong as freight charges across the Pacific showed improvement. USA’s Passenger Vehicle sales remained positive, implying good demand for nitro Benzene. Inquiries with retailers revealed that although retail sales improved, the inventory stocks remained high. Pharmaceutical demand showed a marginal improvement reflected in the price rise of important APIs.

In European markets, the prices of Benzene showed a bullish trend in August 2023, while the prices of Nitrobenzene remained stable. Inquiries revealed a significant build-up of inventory stocks largely through imports from Japan, China, etc. Major consumers of Aniline, a derivative of Nitrobenzene,  revealed that the prices of Nitrobenzene in Europe are expected to show a bullish trend on account of a higher inflationary trend pushed by OPEC+ rate cut in the coming months, leading to restocking of piling up of lower inventories maintained by the downstream manufacturers of rubber accelerators, etc. through imports and domestic suppliers. Europe is facing a general decline in demand coupled with high inflation. Financial and Market analysts have alluded to the decline in demand further as OPEC+ oil cuts extend.

In Asian markets, the prices of Benzene showed a bullish trend in August 2023, while Nitro Benzene showed a stable trend. A similar trend was observed across the domestic markets of India, South Korea, and Japan. The demand side from the domestic consumption of Nitrobenzene remained strong in the Indian markets, while the export performance remained stable in the remaining markets. Pharmaceuticals remained the largest consumer of Nitrobenzene in the given period, while occasional improvement in demand from the rubber and dyes industry was observed. Rising energy and feedstock prices of Nitrobenzene triggered by the OPEC+ production cut and a decline in Russian discounts have led the suppliers to transfer the cost to the consumers. Asian Nitrobenzene manufacturers remain competitive in the global market markedly due to lower energy costs incurred.

Accordingly, ChemAnalyst studies on the market trends of Nitrobenzene revealed that the OPEC+ production cut is expected to affect global demand as inflationary pressure increases observed in European and American economies. American and European economies have already started restocking fresh supplies of Nitrobenzene and expect to reduce the inflationary risk in the coming months. Russian oil discounts to Asian giants like China and India, which cushioned off against the rising crude prices, are expected to end, thus pushing these countries into inflationary pressure. Multiple vendors have alluded to the diversification of the Nitrobenzene supply chain by sourcing feedstock.