Europe August ethanolamine prices rise after ethylene increase

22 August 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--European August ethanolamines prices have increased on the back of the €140/tonne ($175/tonne) increase in the August ethylene contract price, but demand has been rather flat, market sources said on Wednesday.

Hikes recorded for August ranged from a major producer reporting that it succesfully increased its prices by €70/tonne for all grades to other sellers speaking of €30-50/tonne increases and even roll overs in some instances.

Monoethanolamine (MEA) prices have moved up by an average of €30/tonne, settling in a €1,310-1,400/tonne price range.

Diethanolamine (DEA) was valued at €1,020-1,080/tonne, up by €30/tonne.

Although increases were heard for DEA based on higher feedstock costs, one seller described its August prices as flat, but confirmed that it had taken a step back from the market as it was building stocks ahead of a planned outage.

“We have maintenance [on DEA] at the end of September and even less capacity for the spot market. So we are only supplying long term existing customers,” the seller said, adding that it had received a number of spot enquires for DEA from non-traditional customers.

“We’ve received a number of spot enquires, which I think is a reflection of the increases in the market. However, we can’t offer,” he said.

Triethanolamine prices (TEA) were reported at €1,430-1,480/tonne.

All contracts were agreed on a free delivered (FD) northwest Europe (NWE) basis.

Summing up its demand over the past two months, a major producer said: “Demand is good if you sum up July and August. It’s in line with an average month during the year. There is no recession in ethanolamines from my point of view.”

“We see the market as good, we can’t complain,” the producer said. 

Another producer said in terms of market fundamentals it had not seen much change in August.

“I’ve not seen any major changes. August is a quiet month anyhow. Only those buyers that really need to buy will buy,” it said.

The producer increased its MEA prices by €30/tonne, TEA by €50/tonne and DEA by €30/tonne.

“I see DEA as pretty long and I’ve heard rumours that Chinese are back showing some interest in Europe,” the producer concluded. 

Another supplier said: “Here and there you can get increases but [they are] small. Some customers are even looking at a rollover. These very low prices were created by ethylene falling by €170/tonne.”

“Everybody has pushed the price down and now it needs to go up. Naphtha is up so ethylene will be up for September and I expect [ethanolamine] demand to improve,” the supplier added. 

Despite talk of rising feedstocks costs in September and restocking as buyers come back to the market, not everyone in the ethanolamines market is convinced that next month will be a “good” month.

“In July I would have said September would be a good month, but there is lots of talk about credit and payment terms so I’m not so sure, especially if naphtha and crude continue to firm,” said a trader

Another trader said it was difficult to foresee what would happen in September.

“Although an increase in prices and demand is possible, it’s a tough environment. People are prepared to sell less and produce less,” he said.

($1 = €0.80)

By: Julia Meehan
+44 20 8652 3214

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