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Jilin aniline equipment explosion market "seismic" minor signs of speculative price increases
On the afternoon of November 13 (Sunday), a series of explosions and fires occurred at the aniline plant within the SBP complex of Jilin Petrochemical Company. Despite being the largest aniline producer in the country, the incident did not trigger a significant market reaction. The aniline market experienced only a minor fluctuation, halting its previous downward trend without showing signs of speculative price hikes.
On Monday (the 14th), most domestic aniline manufacturers maintained stable factory prices, with the exception of Jilin Petrochemical, which temporarily shut down its aniline plant. Hebei Yi Heng's factory price remained at 11,000 yuan per ton, unchanged from last weekend. Similarly, Henan Chemicals and South Chemical Corporation kept their prices at 10,200 yuan, consistent with the previous week. However, Nanjing Chemical raised its factory quotation to 10,500 yuan, up by 300 yuan from the prior period.
According to insiders at Nanjing Chemical, the market's muted response was not due to information suppression or market apathy, but rather because of an oversupplied domestic aniline market. By the end of 2004, China's aniline production capacity had reached 450,000 tons, and it has now exceeded 500,000 tons. Additionally, Nanhua Group’s 100,000-ton facility is nearly complete and preparing for testing, while Shanxi Tianji Group’s 130,000-ton project is expected to be operational by year-end.
The domestic aniline market has been in a declining trend since June, with continued oversupply throughout the past week. Most small domestic producers are operating at low capacity, and some in North China have even halted operations for maintenance to reduce market supply.
Jilin Petrochemical operates multiple aniline facilities with a total annual capacity of 136,000 tons. In 2004, it ranked first in China and second in Asia. The explosion occurred at its new 70,000-ton production unit. Jilin's aniline primarily serves the northeast, north China, Shandong, and export markets, with the northern region being relatively saturated and price-sensitive.
Currently, the market is in an off-peak season for aniline (with peak demand from March to June). Many manufacturers, traders, and downstream users still hold inventory, so the Jilin incident is unlikely to cause a sharp price surge. However, such a major accident will likely have a psychological impact on the market, potentially preventing further declines and leading to a slight recovery. Small producers in North China may increase production and expedite ongoing projects to fill any market gaps.