FocusChina’s amines prices peak out on rising supply, muted demand

09 September 2013 04:22  [Source: ICIS news]

By Felicia Loo

Ethanolamines are feedstock for detergents among other consumer goodsSINGAPORE (ICIS)--China’s ethanolamines prices may have peaked out on prospects of rising supply, with demand for the fourth-quarter set to be muted in the world’s second-largest economy, market participants said on Monday.

Spot prices of imported monoethanolamines (MEA) into China rose to $1,330-1,450/tonne (€1,011-1,102/tonne) CIF (cost, insurance & freight) China for the week ended 4 September 2013, up by 16% from the levels of $1,150-1,250/tonne CIF China in the week ended 5 September 2012, ICIS data showed.

Drummed prices of imported diethanolamines (DEA) were assessed at $1,360-1,450/tonne CIF China, compared with $1,230-1,450/tonne CIF China over the same period, it indicated.

On triethanolamines front, prices increased to $1,450-1,550/tonne CIF China for the week ended 4 September, from $1,310-1,450/tonne CIF China a year ago, the data showed.

“There will be limited upsides to prices. In fact, prices have reached the ceiling. Following the end of [domestic] plant turnarounds, and with demand to decrease during the wintry months, prices have peaked for now,” said one market participant.

Tightening cargo availability of imported material owing to plant shutdowns both in the region and within China have helped shore up prices for imported amines and also in the domestic markets, according to ICIS.

“Demand is not particularly strong. End-users are buying on a need-to basis because downstream demand is just stable. Sky-high prices may scare off buyers instead,” said one distributor, explaining why suppliers in China were maintaining high offers instead of increasing them further.

The recent hike in the local prices, which were triggered by higher feedstock ethylene oxide costs and the scarcity of supply, supported the overall firmer prices, market participants said.

MEA prices in China rose to yuan (CNY) 11,500-12,000/tonne ($1,879-1,961/tonne) EXWH (ex-warehouse) east China basis for the week ended 4 September, from 10,800-11,200/tonne EXWH in the week ended 5 September last year, ICIS data showed.

Domestic TEA prices rose to CNY12,500-13,200/tonne EXWH east China from CNY12,300-12,800/tonne EXWH over the same period.

Meanwhile domestic DEA prices were assessed at CNY12,000-12,500/tonne EXWH east China in the week ended 4 September 2013, compared with CNY12,500-12,700/tonne EXWH a year ago, according to ICIS.

Supplies remained somewhat tight as a major amines exporter in southeast Asia is conducting a maintenance at its plant.

Malaysia’s PETRONAS Chemicals Group (PCG) on 1 September shut on schedule its 75,000 tonne/year ethanolamines unit in Kerteh, Terengganu, for a regular maintenance. The turnaround is expected to last until the end of October.

Some weeks before the maintenance, PCG had faced a plant outage that led to a tightening pool of supply available for exports, and partly driving up prices in China.

On 30 July, PETRONAS lifted a force majeure in place since 28 June, after having restarted its 140,000 tonne/year ethylene oxide (EO) facility, including its 75,000 tonnes/year ethanolamines unit in Kerteh, Terengganu, on 24 July.

The force majeure was declared as the company’s EO plant, along with the EO derivative units at the site, which include the ethanolamines unit, was shut on 21 June because of equipment failure.

However, the tight supply situation is expected to ease in the coming weeks as plant maintenance ends in China and as a major producer in northeast Asia has resumed operations at its Kaohisung-based plant, market participants said.

BASF-YPC Co Ltd has restarted its 76,000 tonne/year ethanolamines plant at Nanjing in China since 2 September, market sources said on 3 September.

The plant was taken off line for regular maintenance from 10 August. BASF-YPC declined to comment.

Dutch producer Akzo Nobel’s 80,000 tonne/year amines complex at Ningbo in Zhejiang province is expected to be restarted at the end of September, market sources said. The facility is currently undergoing a regular turnaround, they added. It was taken off line on 9 August, sources said.

Meanwhile, Taiwan’s Oriental Union Chemical Corp (OUCC) has restarted one of its two ethanolamines units in Kaohsiung, Taiwan, since the end of August, a source close to the company said on 3 September. OUCC operates two 40,000 tonne/year ethanolamines units at the site. The plant was taken off line on 13 May while the other unit has been idled for a while.

The other producers in China continue to operate at 60-70% of capacity, with no rate hike in sight.

“We do not want to run the risk of causing surplus in the market so we will keep run rates at bay,” said a producer in east China.

Furthermore, it remains to be seen whether the positive economic data that emerged from China would be sustained in the coming months, market participants said.

The demand for ethanolamines would be tied closely to the economy, as with all other plastics.

MEA's major use is in ethylene amines and imines (mainly captive production), and personal care and detergents.

DEA's primary demand is in herbicides, followed by detergents and personal care, and refining/gas treatment.

 ($1 = €0.76 / $1 = CNY6.12)

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

By: Felicia Loo

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