FocusChina ethanolamines to skid on weaker EO prices, soft demand

18 July 2013 06:28  [Source: ICIS news]

By Felicia Loo

Ethanolamines has applications in agrochemicals, surfactants, personal care and construction. SINGAPORE (ICIS)--Spot prices of ethanolamines in China, the world’s second biggest economy, may extend losses in the coming weeks, weighed down by weaker values of feedstock ethylene oxide (EO), market participants said on Thursday.

Supply of EO will increase in China, because of expanded plant capacity that would further undermine ethanolamines prices in the country, where demand has been softening amid an influx of imports, they said.

“The [domestic] prices are weakening. The imported cargoes are arriving, and that drag down prices,” said one Chinese market player.

In the week ended 17 July, spot prices of monoethanolamines (MEA) fell by yuan (CNY) 100-500/tonne ($16-81/tonne) to CNY10,300-11,000/tonne ex-warehouse (EXWH) east China basis, according to ICIS.

Over the same period, diethanolamines (DEA) spot prices lost CNY400/tonne at the low end to CNY10,600-11,200/tonne EXWH east China basis, it stated.

Meanwhile, prices of triethanolamines (TEA) of 99% purity dropped CNY200/tonne at the low end for the week ended 17 July to CNY11,700-12,200/tonne EXWH east China basis, ICIS data showed.

Ethanolamines has applications in agrochemicals, surfactants, personal care and construction. MEA is produced by reacting ethylene oxide (EO) with ammonia. The chemical reaction also produces DEA and TEA.

“The [ethanolamines] inventories are full [in China], and the downstream demand is no good. On the other hand, the output of EO has increased. There will be oversupply of EO in time to come,” another market participant said.

Ethanolamines prices fell mostly because of weaker EO prices, market participants said.

Prices of EO in eastern China were unchanged at CNY10,000/tonne EXWH in the week ended 17 July, after having fallen by CNY500/tonne in the week ended 10 July, they said.

“Demand for ethanolamines is shrinking, while there is no lack of supplies. The construction sector in China is getting weaker, just like the entire Chinese economy,” a third market player said.

China’s economic expansion decelerated further in the second quarter, logging in an annual growth of 7.5%, which was the lowest in four years, official data showed on 15 July.

In the previous quarter, the Chinese economy posted an annual growth of 7.7%, bringing the average expansion in the first six months of 2013 to 7.6%, according to data from the National Bureau of Statistic (NBS).

Fixed asset investments from January to June 2013 increased by 20.1% year on year, down by 0.3 percentage points from the same period last year, the data showed.

In June, China’s industries recorded an 8.9% year-on-year growth, representing a 0.3 percentage-point decline from May.

($1 = CNY6.14)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Felicia Loo

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