Europe ethanolamines market starts difficult Q2 pricing discussions

26 March 2014 15:42 Source:ICIS News

LONDON (ICIS)--European ethanolamine buyers and sellers on Wednesday shared divergent views on price outcomes for quarterly contracts in the second quarter of the year.

Producers point to tight availability, healthy demand and limited imports, and say they are aiming for quarter-on-quarter price increases. They point to rising spot and monthly prices as evidence.

"We are not prepared to reduce price for April...we were squeezed over last quarter already. Why should we move prices down even if raw material decreases?" said one producer.

“Slowly, slowly they [buyers] start agreeing to increases,” said one distributor.

Buyers point to falls in key raw material ethylene as well as stable demand to underpin arguments for price reduction. They believe March price increases may have been overdone.

“March seems a bit crazy compared with February, ethylene is down so [quarterly contracts] will be. We expect the market to be longer in April. Discussions are ongoing,” said one buyer.

“A €5-10[/tonne] increase [would not be] challenge[d]. More than that could be a problem. [There is] no change to raw material side [pricing] or demand side [volumes],” said a second buyer.

The success of the contract price increases will vary by homologue, according to a second producer.

“[It will be] successful for MEA (monoethanolamine): +10-20 [€/tonne]. DEA (diethanolamine) [buyers] definitely do not have so many choices if [they] want significant amounts. TEA (triethanolamine) [price increases are] tougher to take through,” explained the producer.

March contracts were up on February, with a €10/tonne increase for MEA to €1415-1465/tonne FD   (free delivered) NWE (north-west Europe). DEA was up €35-50/tonne to €1190-1255/tonne FD NWE. TEA was stable at the top end but saw increases of €10/tonne to the lower end of the range to €1190-1255/tonne FD NWE.

By Rhian O'Connor