27 February 2013 17:00 [Source: ICIS news]
By Julia Meehan
LONDON (ICIS)--European demand for ethanolamines is expected to remain steady moving into March with an upward shift in buying activity not widely expected because there is still so much economic uncertainty, sources said on Wednesday.
“Customers are still nervous and I don’t see the market changing much moving from February into March,” said a consumer for the construction sector.
For the triethanolamine (TEA) buyer, demand had been very strong but not for the European market.
“Demand is excellent worldwide. When Europe is not doing well we can sell to Asia and Africa, wherever we can. Business really is not good in Europe and its down by around 10% compared to previous years, but for the developing countries demand is constantly increasing,” it said.
A major buyer of all three ethanolamines grades also expects the supply and demand balance of the market to be the same in March as it was in February.
“There are lots of talk and rumours but I prefer to stick to the reality - there is enough TEA in the system and we get all the quantities we need without any issue or any premium,” the buyer said.
In relation to ethanolamine prices in March, sources were only just becoming aware of the €50/tonne ($65/tonne) increase in major feedstock ethylene.
A major ethanolamine producer said that it will be targeting an “average” increase of €30/tonne in March, based on margin retention following the ethylene settlement.
The producer also expects to have limited volumes from mid-March onwards as it prepares for a planned outage.
The March contract price for major feedstock ethylene settled at €1,325/tonne FD (free delivered) NWE (northwest Europe).
Reflecting on the progress of ethanolamines so far in 2013, most producers describe their demand as steady-to-soft despite ongoing production problems at INEOS Oxide’s facility in Lavera, France.
One producer said: “In January and February we sold what we expected but there was destocking in December so we saw a flurry of demand. For DEA [diethanolamine] we are seeing some firming [in demand] and prices are around €1,150-1,200/tonne. It’s strange because fundamentally the market is long, but to us it's feeling a little short.
“For March, I can't really see much changing in terms of demand and availability will be steady. There won’t be a dramatic change,” the producer source concluded.
Ethanolamines can be used for applications such as agrochemical production, surfactants, personal care and construction.
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