China triethanolamines to stay weak on supply glut, poor demand

Focus story by Felicia Loo

SINGAPORE (ICIS)–Ethanolamines trading in China has remained subdued as downstream demand is still weak amid a deluge of supply, market sources said on Thursday.

Upcoming maintenance at key manufacturing facilities in the country should help ease the oversupply condition in the market in the short term, they said.

Triethanolamines (TEA) prices in China were assessed as stable-to-soft this week, notwithstanding the seasonal peak demand period.

On 23 July, imported TEA prices stood at $1,410-1,640/tonne CIF (cost, insurance and freight) China, down by $10/tonne at the high end of the price range; while domestic prices of the material edged down by yuan (CNY) 100/tonne to CNY12,100-12,500/tonne ex-warehouse (EXWH) east China, according to ICIS data.

“The property market in China is not doing well and this is affecting construction demand,” said a market participant.

Ethanolamines have applications in agrochemicals, surfactants, personal care and construction.

Four weeks ago, domestic TEA prices were pegged at CNY12,200-12,800/tonne EXWH east China.

Supply of ethanolamines in the market, including  monoethanolamines (MEA) and diethanolamines (DEA), is expected to decline soon, given scheduled turnarounds at major plants in China.

BASF-YPC Co Ltd (BYC) plans to shut its 76,000 tonne/year plant at Nanjing for three weeks from mid-August, market sources said.

AkzoNobel, on the other hand, is looking at taking its 100,000 tonne/year ethanolamines plant off line for a month-long maintenance from end-August or early September. The plant located at Ningbo in Zhejiang province is currently running at 60-70% of capacity.

Meanwhile, a supply glut of feedstock ethylene oxide (EO) has also been weighing on ethanolamines prices, market participants said.

China will be adding 1.3m tonnes of EO capacity early next year, taking the country’s total EO capacity to 3.5m tonnes/year by end-March 2015, according to industry sources.

At present, the country has a otal EO capacity of 2.2m tonnes. New capacity – stemming from plant expansions or newly built ones – will hail largely from the southern and eastern coastal areas in China.

Domestic EO prices have been lacklustre for several months, with prices unchanged at CNY10,600/tonne.

In the meantime, the Chinese economy continues to face challenges despite a slight acceleration in its annual growth pace to 7.5% in the second quarter from 7.4% in the first three months of 2014.

($1 = CNY6.19)

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