19 June 2012 10:21 [Source: ICIS news]
By Becky Zhang
The prospects for price recovery for ethanolamines do not look bright because of poor downstream demand and weak upstream values, they added.
“The price fall [of EO] is too much, which is beyond our expectation,” a Zhejiang-based ethanolamines trader said in Chinese.
The extent of price fall has caused panic in the downstream markets with customers not buying the material as they are worried that prices will fall further, the trader said.
According to ICIS data, Chinese domestic monoethanolamines (MEA) was transacted at around CNY9,000-9,300/tonne EXWH, down by 19-20% in the past two months.
Locally produced diethanolamines (DEA) was settled at around CNY9,700-9,800/tonne EXWH, 21-22% lower compared with the levels two months ago.
Triethanolamines (TEA) of Thai origin was sold at around CNY11,000/tonne EXWH this week, a sharp fall of 21% in two months.
Surfactant makers, the major downstream users for ethanolamines, have minimised their feedstock inventory to reduce the risk of additional losses on cost, a Shanghai-based trader.
“June-July is a traditional low demand season for surfactant, and the current market situation pushed back further the surfactant processors,” said the trader who spoke in Chinese.
A second Zhejiang-based trader said: “We don’t know how to discuss prices with producers as we will make loss next week if we buy now.”
The trader does not plan to buy until EO prices stabilise though players expect
EO still enjoys high profit margins and its upstream ethylene has plunged by a total of 33% since the middle of April, the second Zhejiang-based trader said.
“We have no choice but to reduce EO prices or our customers won’t lift EO which cannot be stored,” said a company source from Sinopec.
Prior to the steep falls, EO prices have been pegged at CNY11,800/tonne EXWH for three months from end February to early June although the downstream ethanolamines prices remained on a downtrend, according to ICIS.
($1 = CNY6.36)
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