Europe ethanolamines pressured by low demand and feed costs

13 November 2013 15:31  [Source: ICIS news]

LONDON (ICIS)--European ethanolamines prices are under pressure in November because of lower feedstock costs and competitively priced imports, sources said on Wednesday.

“I see monoethanolamines (MEA) in the spot market as rather long. There are quite some imports in hand and European demand is still not really great. But I can imagine European producers are trimming production and quantities,” said a trader.

The trader quoted MEA at €1,330-1,340/tonne ($1,797-1,811/tonne) FD (free delivered) NWE (northwest Europe) as a “non-discounted” price. It also quoted triethanolamines (TEA) in a €1,370-1,400/tonne price range.

A second trader also spoke of lower prices and a dip in demand in November.

“TEA and MEA are down €10-20/tonne. MEA is €1,320-1,340/tonne on an FCA basis. Diethanolamines (DEA) is tightish, but I am not worried as I don’t have much demand for it. Demand is not great,” the trader said.

Although lower prices were talked about in the trade and distribution market, European producers were adamant that just because the contract price for major feedstock ethylene moved down in November, they were not prepared to drop their offers.

One producer said: “Demand is a little slow these days, but it’s November and year-end.

“November prices – what we are discussing is that customers are not accepting [increases] when it [ethylene] goes up, so why should we decrease when it goes down?”

The producer said it was “not being aggressive on volumes”.

“There is no point dropping prices just to move a truck,” the producer concluded.

A second producer thought similarly, saying: “November prices will be stable. Producers say they intend to hold prices steady despite the €30/tonne decrease in November ethylene contracts.

“Prices did not follow ethylene’s upward trend in the summer and so why should ethanolamines now decrease?” it added.

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 = 0.74)

By: Julia Meehan
+44 20 8652 3214

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