Europe ethanolamines under pressure if May C2 contract price falls

24 April 2013 16:26  [Source: ICIS news]

LONDON (ICIS)--European ethanolamines will face downward pressure if the May ethylene contract price falls, market sources said on Wednesday.

“The [ethylene] market will face some kind of further decrease, but I am uncertain on the amount, but we are expecting ethylene to significantly drop,” said a reseller of ethanolamines.

“Our [ethanolamines] demand is quite okay, but not excellent,” it added.

Demand for major ethanolamine feedstock ethylene is soft and a drop in the value of naphtha is compounding the weak sentiment.

Because of this, a decrease in the May ethylene contract price is anticipated and sources in the market expect a bigger drop than in April.

Expectations in the ethylene market range from minus €50/tonne ($65/tonne) to minus €125/tonne and possibly more, depending on the source.

A buyer of ethanolamines, who has had steady pricing since the start of the year, is also expecting to see lower prices in May.

“If ethylene is decreasing then so should ethanolamines,” it said.

The buyer described its demand as steady, adding that it had no problems securing all the volume it needed.

Prices for all three grades of ethanolamines have been unchanged since the beginning of the year, despite the ethylene contract price moving up in March then back down in April.

Downstream, in the esterquats (clothes softener) market, a major buyer said its demand in the second quarter is softer compared to the first quarter.

It also said it had no problems securing all the volume it needs.

“Demand from the first to second quarter is lower,” the major buyer said.

“We seen some very aggressive pricing from the US and Middle East and now the demand is not there, European producers are trying to maintain the market price, but they won't be able to hold onto this,” it added.

Ethanolamines can be used for applications such as agrochemical production, surfactants, personal care and construction. Monoethanolamine (MEA) is produced by reacting ethylene oxide (EO) with ammonia. The chemical reaction also produces diethanolamine (DEA) and triethanolamine (TEA).

($1 = €0.77)

By: Julia Meehan
+44 20 8652 3214

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