Chemical profile: Asia ethanolamines

23 September 2013 00:00  [Source: ICB]

USES

There are three main ethanolamines: monoethanolamine (MEA), diethanolamine (DEA) and triethanolamine (TEA). The latter is available in two grades, depending on purity and colour: TEA 85% and TEA 99%.

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. A large portion of TEA goes into detergents and personal care, followed by engineering/metal-working and concrete manufacture.

SUPPLY/DEMAND

Asia ethanolaminesAsia’s demand is deemed stable-to-soft in response to a slowing regional economy. A tumbling Indian currency is weighing on demand for ethanolamines, which is widely used as surfactants in the country. The currency fall has led to Indian buyers backing out from the market, and prompting end-users to buy only when they must.

Plant shutdowns in China and southeast Asia led to firmer prices of amines in the region. A key South Korean producer retained amines locally because of higher domestic demand.

Malaysia’s PETRONAS Chemicals Group (PCG) on 1 September shut its 75,000 tonne/year ethanolamines unit in Kerteh, Terengganu, for maintenance. The turnaround is expected to last until the end of October. The plant was restarted recently following the lifting of a force majeure at the end of July.

Domestic prices in China were being shored up by major plant shutdowns in the country. However, Chinese amines demand is expected to stay flat for the remainder of the year and once the plants get restarted, the market would see supply outpacing demand.

PRICES

Higher feedstock ethylene oxide (EO) prices have driven up domestic prices in China, in addition to plant shutdown issues.

MEA prices in China rose to yuan (CNY) 11,500-12,000/tonne ex-warehouse (EXWH) east China basis for the week ended 4 September, from CNY10,800-11,200/tonne EXWH in the week ended 5 September last year.

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.

TECHNOLOGY

Ethanolamines are produced by adding EO to ammonia when the ammonia is either in an aqueous or gaseous state. Excess ammonia is removed in the first column and recycled, before water is removed and the homologues are separated. The product mix can be varied, from an MEA content of around 70% to a TEA content of about 50%. Recycling of the various products to produce more DEA or more TEA can vary the end-product mix.

OUTLOOK

The outlook for the Asia ethanolamines market is subdued, with rising supply expected as plant maintenance ends.

BASF-YPC restarted its 76,000 tonne/year ethanolamines plant at Nanjing in China since early September, following a turnaround that started on 10 August, sources said.

Dutch producer Akzo Nobel’s 80,000 tonne/year amines complex at Ningbo in Zhejiang province is expected to restart at the end of September, market sources said. The facility was taken off line on 9 August for maintenance.

Taiwan’s Oriental Union Chemical Corp (OUCC) restarted one of its two ethanolamines units in Kaohsiung, Taiwan, since the end of August. 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 some time.

Asia ethanolaminesThe other producers in China continue to operate at 60-70% of capacity, with no rate hike in sight on a weak demand outlook.

Meanwhile, market players expect China’s Sinopec to revise down EO prices amid prospects of rising supply owing to expanded capacity. EO is one of the most important indexes for end-users and traders to detect the price trend in China’s ethanolamines.

Demand tends to slow in December as the construction sector enters its seasonal lull in demand from December to February. Cold weather during these months, especially in northern China, hampers construction projects.

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

HSBC’s final reading of its purchasing managers’ index (PMI) for China rose to 50.1 in August from 47.7 in July, boosted by new orders and output, the investment bank said on 2 September. PMI is a barometer of manufacturing, with a reading above 50 indicating expansion.

However, GDP growth in China is expected to slow this year to 7.4% compared to 7.8% in 2012, according to the Organisation for Economic Co-operation and Development (OECD).


By: Felicia Loo



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