Price and market trends: Europe ethanolamines destocking will not hit pricing - traders

07 December 2012 10:31  [Source: ICB]

Ethanolamines contract prices are not expected to be hit by year-end destocking, as feedstock costs remain steady-to-firm and the market will close the year on a balanced note, market sources say.

Even prior to the feedstock ethylene contract price settling at a rollover for December, buyers and sellers of ethanolamines were not expecting dramatic price changes.

"The market was a little bit quieter. I think everybody was waiting for ethylene to settle. In December I don't expect a lot of activity - maybe some in the first seven to eight days, but there will be no changes on price," one importer to Europe said.

Looking ahead to January, the importer expects demand to pick up, adding: "Generally speaking January is normally a good month, and demand picks up.

"[Demand] might slow by March, but quarter one will be better than quarter four. Much will depend on the economic situation, although ethanolamines are really recession-proof," he concluded.

A second importer to Europe described its demand as stable, but confirmed that the market was experiencing "a year-end effect", adding: "Supply is also curbed by INEOS, so the market is pretty balanced and there is no oversupply."

The seller said that it was increasing its prices, particularly for diethanolamine (DEA), adding: "DEA is demand-driven and we are seeing demand out of line. We know there is lower demand overall in Europe than there is production. But if you know there is a surplus in a region why would an importer bring it in?

"[For] DEA we are driving it up to €1,300/tonne [$1,688/tonne] FD [free delivered] NWE [northwest Europe]. DEA [prices are] getting closer to MEA [monoethanolamine] prices]." A European producer echoed its rival sellers in terms of demand and pricing.

"We're keeping an eye on year-end and everything running smoothly. I am expecting some higher demand in January, but this is mainly due to restocking. There is no reason why demand should go up [or down] significantly."

By: Julia Meehan
+44 20 8652 3214

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