Europe January ethanolamine contract prices roll over

15 January 2014 23:59  [Source: ICIS news]

LONDON (ICIS)--European ethanolamine prices are widely seen as unchanged for January, sources said on Wednesday.

Producers were keen to push up prices after two months of hikes in key input ethylene. However against a backdrop of plentiful supply and still limited demand, price increases were seen as too ambitious by buyers.

“The general trend was to try to push up [prices] due to raw material costs. However we haven't yet been able to recover these in the price,” said one producer.

“Increasing prices is difficult. Demand - we could wish for something better. It is not as good as it should be,” said one trader.

Diethanolamine (DEA) was seen as the tightest market, with US herbicide demand strong and one major producer sold out of spot volumes. Here there was some upward pricing pressure, although in a thin market this was resisted by buyers. Prices are assessed as stable at €1,150-1,200/tonne FD (free delivered) NWE (northwest Europe).

Meanwhile, some small downward pressure continued in monoethanolamines (MEA) after last month’s price fall. MEA prices were assessed as unchanged at €1,405-1,455/tonne FD NWE.

Triethanolamine (TEA) is seen as relatively stable at €1460-1530/tonne FD NWE, with the construction market in particular holding up better than expected due to mild European weather.

Some monthly contracts are linked directly to raw materials, and here rises of €5-10/tonne were seen on the back of hikes in raw material ethylene.

One buyer said there had been difficulty in obtaining product in late December/early January, as many producers were waiting to see if higher prices would stick. However, there seems to be more product available in the market now that flat January pricing is more widely accepted.

Opinions are mixed on timing of a demand recovery, with some starting to see a pickup in business in the last few days, but others pessimistically expecting limited demand until the end of the first quarter.

One thing is clear, with two months of significant margin squeeze, producers will be looking for price rises as soon as demand does come back to the market.

“I expect demand to be in a normal situation by the end of the month. We need to do something on pricing, raw material pricing has been increasing last couple of months, we need to do something there,” said another producer.

By: Rhian O'Connor
+44 208 652 3214

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