Europe ethanolamines market awaiting August ethylene settlement

24 July 2013 12:18  [Source: ICIS news]

LONDON (ICIS)--The European ethanolamines market is waiting for the August contract settlement of major feedstock ethylene in order to determine price direction next month, sources said on Wednesday.

“It’s the right timing for the ethylene increase. August is the one month of the year when you try and put your prices up,” said a European producer of ethanolamines.

The producer described its stock position as “short”.

In relation to demand, the producer said: “[Triethanolamine] in Europe is pretty good, I’m not complaining. The only issue is margins. I think there has been some pre-buying in anticipation of ethylene going up and some customers who are closed in August need to pre-produce a bit.”

In the distribution market, sources expect to see some upward price pressure if the ethylene contract price moves up.

“The big boys will push I am sure, but let’s wait for ethylene to settle first and then see. Our demand is very quiet,” said a distributor of all three grades of ethanolamines.

Another distributor said it had felt no sense of market tightness, adding that the outcome of August prices would also be down to supply and demand dynamics, and not just ethylene.

“August will be quiet – it always is. Prices will be influenced by supply and demand dynamics, not just ethylene,” it said.

Meanwhile, a major buyer consuming for the esterquats (clothes softener) sector said it had no problem securing all the triethanolamine (TEA) it needed, despite some difficulties with the supply of material from the Gulf of Mexico.

“There is plenty available. There are talks of turnarounds and the delay of material from the US, but in reality it is very different. You can get what you want,” the major buyer said.

In relation to prices, major TEA buyers for the personal care and detergent sector consume much of their contract volumes on a quarterly basis.

The major buyer quoted “below” €1,350/tonne ($1,776/tonne) as its Q3 contract price.

In July, market prices were steady for diethanolamine (DEA), but moved down for monoethanolamine (MEA) because of pressure from imports. TEA prices also eased, since most assessments fell below €1,500/tonne.

Prices for all three grades were quoted on a free delivered (FD) northwest Europe (NWE) basis. 

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

($1 = €0.76)

By: Julia Meehan
+44 20 8652 3214

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