Price and market trends: European ethanolamines availability remains tight

17 March 2014 00:00 Source:ICIS Chemical Business

European ethanolamines product remains in short supply, sources said on 5 March, although opinions are mixed as to whether the cause of the market tightness remains limited availability, or if it is being driven by improved demand.

Supply is still said to be limited, with lower import levels than normal. US product availability has also been tighter, as demand in North America is said to be strong.

In addition, Sintez OKA, Russia’s leading producer, has had limited exports due to raw material shortages.

EU Ethanolamines

“There are no cheap imports and a better supply-demand balance”, said one producer.

However availability is said to be improving slightly, with one producer back in the spot market and some product now coming in from Russia. Some distributors see plentiful product on its way from Asia.

“Asian price levels are significantly below Europe – [we see] huge MEA [monoethanolamine] [arbitrage],” according to one distributor.

“We don’t see Asian product yet. It’s a big question mark in the market,” said one trader.

Some market participants are also seeing improved demand driving a tighter market.

“Demand is good going towards seasonal use of some products,” said a second producer in the market.

“We see an increase in demand for DEA [diethanolamines]; more requests. Contracted customers have really increased demand – for surfactants, adhesives, polyurethane coatings. We see more orders from our long-term distribution partners with smaller customers,” according to the first producer.

However, others in the market deny any pick-up.

“We see no change in demand,” said the distributor.

The tightness is allowing producers to ask for price increases in March, and particularly going into the second quarter of the year. “We have made price announcements publicly, and now we have to stick with it,” said the first producer.

“We see where we can adapt pricing,” said the second.

“I see prices increasing in Q2 – [the] only parameter that plays against [it] is [the] increasing euro and lower feedstock [costs],” said one trader.

However buyers continue to resist the increases.

“[Producers] don’t manage to drive the price up – they would need higher demand to justify such speculation,” said one buyer.

By Rhian O'Connor