23 September 2013 00:00 [Source: ICB]
European ethanolamine market participants have started discussions for September with sellers facing a challenge to raise prices as they try to offset higher raw material costs, market sources said on 11 September.
So far, sellers have managed to achieve smaller-than-targeted increases as demand has yet to show a significant recovery from the summer holiday lull, market sources said.
One European ethanolamines producer said it managed to get an increase of €20-30/tonne for grade triethanolamines (TEA) and monoethanolamine (MEA) but failed in its attempt to raise contract prices for diethanolamine (DEA).
“It’s tough to raise prices on the DEA market because structurally it’s a long market and producers are trying to make as little DEA as they possibly can because demand is falling,” one market player said.
“We are little shocked by the absence of demand so far, we were expecting buying interest to return in September and there is little sign of it as yet.”
One major seller previously announced a €50/tonne ($67/tonne) increase in September for all three grades of ethanolamines, mirroring the ethylene increase, while another announced a €75/tonne rise.
Lack of demand so far this month may be attributed to pre-buying among some customers ahead of the September ethylenerise, some market sources said.
Customers are mostly content to keep to contractual quantities, and not buy extra product, sources said.
“I am getting customers telling me they still have lots in their tanks so they don’t want to buy spot material,’’ one trading source said.
“The surprising thing is that demand is usually poor from southern Europe but now we are seeing little demand from northwest Europe and the Nordic countries.’’
Sellers of Mexican material are settling most of their contracts for MEA and TEA at a rollover level, and in some cases a €10/tonne increase over August.
In the meantime, supply of European material is described as balanced but imported material into the region means that buyers have no problems sourcing extra material if required.
A number of European plant shutdowns means that producers are building stock and have little extra for spot business.
Imports of MEA and TEA from the US were on offer although prices were undisclosed.
European sellers of DEA said that export opportunities are limited, particularly to China, where prices are not high enough to warrant exporting eastbound, seller sources said.
European DEA is being exported to the US, south America and the Middle East.
Spot prices for MEA were quoted at €1,330-1,350/tonne FD Europe, TEA at €1,420-1,450/tonne FD Europe. DEA prices are quoted at about €1,110/tonne FD NWE.
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