China amines gain ground on festive stockpiling, tighter supply

By Felicia Loo

SINGAPORE (ICIS)–China’s amines prices may increase in the weeks leading to the Lunar New Year holidays – which will kick off at the end of January – as end-users are stockpiling the products amid tightening supply, market participants said on Thursday.

While demand was not particularly robust in the country, the light stockpiling activity along with tightened supply of southeast Asian material helped boost both China’s import and domestic prices of amines across all grades, they said.

Domestic plant maintenance also supported the price increases of monoethanolamines (MEA), diethanolamines (DEA) and triethanolamines (TEA), they added.

“There is some demand before the [Lunar] New Year and there isn’t much supply,” said one participant based in eastern China.

The prices rose quite substantially compared with levels nearly three weeks ago, ICIS data showed.

Imported MEA prices rose by $100-150/tonne in the week ended 8 January to $1,350-1,400/tonne CIF (cost, insurance and freight) China, according to ICIS.

China’s DEA prices on an imported basis increased by $30-150/tonne to $1,450-1,530/tonne CIF China and imported TEA prices gained by $100-140/tonne to $1,450-1,590/tonne CIF China over the same period, the data indicated.

“Plant maintenance both in China and outside China are making supplies tighter, and this in turn support prices,” said another market player.

There were very limited offers heard with regards to regular supplier Thailand’s PTT Global Chemical (PTTGC), as the volumes were being reduced in response to an impending planned maintenance, market participants said.

PTTGC will shut down its 50,000 tonne/year ethanolamines unit in Map Ta Phut from 15 January for maintenance that would last until mid-February, and during which there will be a catalyst change in the unit.

In China, South Korea’s Lotte Chemical plans to shut its 50,000 tonne/year ethanolamines plant at Jiaxin city for “”>routine maintenance from 10 January. The plant, which is currently running at half its capacity, will be shut for two to three weeks.

Another producer in China was facing feedstock ethylene oxide (EO) issues, resulting in lower production of ethanolamines, market participants said.

Stable EO prices over the past weeks and rising ethylene prices in Asia underpin China’s domestic prices of amines.

China’s local amines prices rose during the week ended 8 January, ICIS data showed. The local MEA prices increased by yuan (CNY) 200-300/tonne ($33-50/tonne) to CNY11,400-12,000/tonne ex-warehouse (EXWH) in east China.

The domestic Chinese DEA prices increased by CNY500/tonne to CNY11,800-12,500/tonne EXWH and the TEA price rose by CNY300-900/tonne to CNY12,300-13,200/tonne EXWH.

Meanwhile, prices of EO in eastern China remained stable in the week during 8 January at CNY10,400/tonne EXWH, according to market participants.

Ethylene spot prices in northeast Asia rose by $60-80/tonne to $1,500-1,540/tonne CFR (cost and freight) NE (northeast) Asia in the week ended 3 January, while the spot prices in southeast Asia increased by $15-40/tonne to $1,415-1,490/tonne CFR SE Asia over the same period, ICIS data showed.

However, some market players cautioned about further price hikes following the Lunar New Year holidays, as the overall Chinese economy remained uncertain.

China’s purchasing managers’ index (PMI) edged down to 51.0 in December from 51.4 in the previous month as a result of falling export orders towards the end of the year.

The new export orders index slipped by 0.8 from the previous month to 49.8, and the import index was 1.5 lower at 49.0, according to data from the China Federation of Logistics & Purchasing (CFLP). A reading below 50 indicates contraction.

The decrease in the domestic PMI in December was attributed to the holiday season, as demand was muted during the Christmas and New Year holidays, celebrated widely in the West, as well as the Chinese Lunar New Year holiday, according to CFLP.

($1 = CNY6.05)

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