FocusEthanolamines sellers to keep offers despite weak China prices

25 July 2013 04:26  [Source: ICIS news]

By Felicia Loo

Ethanolamines are feedstock for detergents among other thingsSINGAPORE (ICIS)--Ethanolamines sellers are set to maintain their offer levels, shrugging off overall weaker local prices in China because of tight regional supply in Asia, market participants said on Thursday.

In China suppliers refused to cut their offers for monoethanolamines (MEA), diethanolamines (DEA) and triethanolamines (TEA) in response to tight supply in the region, they added.

MEA prices were unchanged at $1,200-1,280/tonne (€912-973/tonne) CIF (cost insurance & freight) China, while DEA prices were stable at $1,280-1,380/tonne CIF China, according to ICIS data.

On the other hand, TEA prices climbed up by $30/tonne at lower end to $1,380-1,500/tonne CIF China, the data showed.

“The market is rather messy. There is pressure from low local prices but suppliers do not want to cut prices,” said one market participant, adding limited offers from key exporting region southeast Asia helped support offer levels.

In the domestic Chinese market, MEA prices were assessed at yuan (CNY) 10,400-11,000/tonne ($1,694-1,792/tonne) EXWH (ex-warehouse) in the week ended 24 July, down from CNY11,000-11,400/tonne four weeks ago, ICIS data showed.

For the same week ended 24 July, DEA prices in drummed packaging stood at CNY10,800-11,200/tonne EXWH, while TEA prices were assessed at CNY11,700-12,200/tonne EXWH, it indicated.

Prices were lower compared with CNY112,000-11,500/tonne EXWH, and CNY12,200-12,500/tonne EXWH, respectively, the data stated.

The overall weakness in domestic ethanolamines prices was in reflection of generally lower feedstock ethylene oxide (EO) prices in China.

Prices of EO in eastern China were stable at CNY10,000/tonne EXWH for the week ended 24 July. This followed a decline of CNY500/tonne in the week ended 10 July, but prices were unchanged since then, according to ICIS.

“There is surplus EO in China. Run rates may increase and EO supply may rise in tandem,” said one market participant, adding expanded EO capacity in China would lead to a broader pool of supply.

Meanwhile, ethanolamines supply into China was tighter because of plant maintenance issues, particularly in southeast Asia.

Malaysia’s PETRONAS Chemicals Group (PCG) declared a force majeure at its 140,000 tonne/year EO facility in Kerteh, Terengganu, on 28 June, a company source had said.

The EO plant, along with the EO derivative units at the site, which include the 75,000 tonnes/year ethanolamines unit, was shut on 21 June because of equipment failure, the source said.

It was unclear whether the plants had restarted at this juncture.

In addition, PETRONAS plans to conduct a major turnaround at its petrochemical complex at Kerteh in Terengganu, from the first week of September to end-October.

The facilities include a 600,000 tonne/year cracker, 400,000 tonne/year monoethylene glycol (MEG) plant and ethylene oxide derivatives (EODs) units, a company source said.

The shutdown was ordered by Department of Safety and Health of Malaysia for a thorough inspection of the petrochemical plants once every three years.

Thailand’s PTT Global plans to shut its EO/ ethylene glycol (EG) plant for a brief five-day turnaround in August to repair plant equipment, a company source said.

The 50,000 tonne/year ethanolamines unit in Map Ta Phut will be shut along with the shutdown of the EO/EG facility, market sources said.

Plant issues aside, the overall decline in the Chinese economy weighed on the ethanolamines markets, market participants said.

HSBC’s flash purchasing managers’ index (PMI) for China fell to an 11-month low of 47.7 in July, down by 0.5 point from June amid a slowdown in new export orders and faster destocking, the investment bank said on 24 July.

PMI is a barometer of an economy's manufacturing activities, with a reading above 50 indicating an expansion, and a lower number denoting a contraction. China's economy grew 7.5% year on year in the second quarter of this year.

“It’s a softening [ethanolamines] market. It’s a non-peak demand season and the Chinese economy is slowing,” said one market participant.

Ethanolamines are used as feedstock in the production of among other things, emulsifiers, detergents, polishes and pharmaceuticals.

($1 = €0.76 / $1 = CNY6.14)

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

By: Felicia Loo

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