Europe ethanolamines market direction in April uncertain – sources

27 March 2013 15:24  [Source: ICIS news]

LONDON (ICIS)--The outlook for the European ethanolamines market is a little unclear because of the fall in the propylene contract price and uncertainty about the supply and demand balance of all three grades in April, sources said on Wednesday.

In relation to the ethanolamine market for April, a reseller said: “I don’t think it’s really about what propylene will do. It will be more about supply and demand.”

The reseller added that it did not expect to see any significant changes to the dynamics of the market moving from March to April in relation to supply and demand.

“I think April will be the same as March, the market is balanced, but there is not really a large demand, but it’s really difficult to say.”

A second source in the distribution sector believed that it was too soon to talk about April prices but described the market as “comfortably” balanced.  

“There is demand and it’s [the market] balanced. There’s not really large demand but customers are buying TEA (triethanolamine) and MEA (monoethanolamine).”

“The first quarter got off to a slow start so everybody is just waiting to see what will happen in the second quarter. But it’s really difficult to forecast,” the distributor concluded.

Producers were also sounding a little uncertain about what will happen in April and indeed the second quarter in terms of pricing and demand. Although they do not expect demand to fall, most are unclear at this stage how strong it will be.

An importer of all three grades of ethanolamines to Europe expects its April demand and price levels to be very much the same as in March.

"For the majority, [April] pricing will be on a similar level as March," the importer said. "Last month we did not see much imports coming in from Asia. Quarter two is normally booming, so I would expect demand improved. The weather has been really bad but I don't see it as a major issue for the esterquats [clothes softener] markets since this is only a third of the TEA demand in Europe.”

A producer, which has been short on diethanolamine (DEA), said it was running normally but had no stock for the spot market.

“On DEA we are hand-to-mouth because of the number of issues last year, but it didn’t impact on our customer base," it said. "But we normally have some stock, and now we have zero stock."

“Demand for us is what we expect. It’s not doing great, but it’s not falling away. I would say it’s fairly static. Our March expectations are not much different to April.”

Another European producer sounded adamant about not moving its prices down in April, regardless of the propylene settlement and the balance of the market.

“My intention is a rollover," the producer said. "We saw a huge increase in ethylene in March and I did not move my prices. There is no reason to adjust prices according to olefins. We took the burden [in March] and we are not going to do it with other products. Customers think if olefins drop derivatives will drop as well, but it won’t happen for obvious reasons.”

The April ethylene contract price settled on Wednesday afternoon down €60/tonne.


By: Julia Meehan
+44 20 8652 3214

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