Price and market trends: China amines prices to rise on feedstock EO

16 May 2014 09:57 Source:ICIS Chemical Business

Limited ethylene oxide (EO) supply could put a floor under ethanolamines prices

China’s domestic ethanolamines prices are likely to firm on prospects of price hikes in feedstock ethylene oxide (EO), whereby a slate of EO plant turnarounds will take place next month, market participants said on 9 May.

In the local Chinese market, the monoethanolamines (MEA) discussions and trades rebounded to yuan (CNY) 10,800-11,000/tonne EXWH (ex-warehouse) during the week to 7 May, up by CNY400-500/tonne from the previous week, ICIS data showed.

Meanwhile, the price discussions for diethanolamines (DEA) rose by CNY100-500/tonne to CNY11,300-11,600/tonne EXWH over the same period.

The prices included the deals for bulk DEA, which were done at CNY10,700/tonne DEL on cash-payment terms, or the equivalent of around CNY11,300/tonne on a drummed basis.

Prices of triethanolamines (TEA) increased to CNY12,200-12,300/tonne EXWH from CNY11,800-12,200/tonne EXWH in the previous week.

“There will be tighter supply of EO because of the upcoming maintenance,” said one trader.

Prices of EO in eastern China remained stable during the week to 7 May at CNY10,600/tonne EXWH, while EO prices in northeastern China stood at CNY10,900/tonne EXWH, according to market participants.

EO in the eastern seaboard have been hovering at CNY10,600/tonne EXWH levels since mid-January. Prices rose by CNY200/tonne in the second half of January in response to rising ethylene prices then, according to ICIS.

TURNAROUND IMPACT
Besides the EO factor, supply of amines would further tighten owing to a plant turnaround at a major producer.

Taiwan’s Oriental Union Chemical Corp (OUCC) is on schedule to shut its 40,000 tonne/year ethanolamines plant at Nanjing, China, for a regular maintenance starting from late May, and the turnaround will last for a month. The Nanjing-based plant is being operated at 60% capacity.

However, other market participants said the price increases would be limited in view of the current sluggish Chinese economy which is chipping away demand for plastics.

Notwithstanding an ongoing maintenance at another producer’s plant in China, prices had declined previously before they gained momentum the week ended 9 May, and this underscored the weakness in demand, market participants said.

“The limit in EO output will help support prices. Other than that, there is no big improvement in the market,” said one market participant.

By Felicia Loo