China amines on downtrend on weak demand despite supply cut

Focus story by Felicia Loo

SINGAPORE (ICIS)–Spot prices of ethanolamines in China face downward pressure from prevailing weak downstream demand, which overshadows supply reduction from plant shutdowns and higher prices of feedstock ethylene oxide (EO), market participants said on Thursday.

Domestic diethanolamines (DEA) prices were assessed during the week ended 3 September at yuan (CNY) 11,000-11,800/tonne ($1,792-1,922/tonne) EXWH (ex-warehouse), down by CNY200/tonne at the high end of the price range from the previous week, according to ICIS.

Meanwhile, price discussions for triethanolamines (TEA) were quoted at CNY12,000-12,800/tonne EXWH over the same period, down by CNY100/tonne at the low end.

For monoethanolamines (MEA), domestic price discussions and trades were assessed stable at CNY10,500-11,200/tonne EXWH during the week ended 3 September, ICIS data showed.

“The downstream demand remains poor and it is difficult for prices to be uplifted,” a Chinese trader said.

The Chinese economy continues remain weak, with a slowing property market dampening construction activities, thus undermining the use of amines.

China’s official purchasing managers’ index (PMI) for August fell by 0.6 from July to 51.1 points, with production index down by one percentage point to 53.2% in August.

PMI is a barometer of an economy’s manufacturing activities. A reading above 50 indicates expansion, while reading below this number denotes contraction.

In August, China’s new orders index was largely down by 1.1 points from July to 52.5, with export and import indexes falling 0.8 to 50.0 and 48.5, respectively.

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

Despite some plant turnarounds in China, domestic amines prices were somewhat subdued during the week ended 3 September as overall demand remained weak.

AkzoNobel plans to shut down its 100,000 tonne/year ethanolamines plant at Ningbo in Zhejiang for about a month of maintenance from 5 September, a market source said.

BASF-YPC Co Ltd (BYC), on the other hand, has a scheduled three-week shutdown at its 76,000 tonnes/year ethanolamines plant at Nanjing from mid-August, they said.

The market has also remained lukewarm to a recent price increase in EO.

EO prices in eastern China rose to CNY10,800/tonne EXWH in early August, up by CNY200/tonne from the previous week – the first increase since January.

In southern China, EO prices rose by CNY100/tonne to CNY10,700/tonne EXWH over the same period.

The EO supply glut, along with new EO capacities, continues to weigh on the amines segment.

Meanwhile, prices of monoethylene glycol (MEG), a major derivative of EO, fell by $15/tonne to $975-981/tonne CFR China Main Port during the week ended 29 August, ICIS data showed.

On an ex-tank China basis, MEG prices declined by CNY100-200/tonne over the same period to CNY7,150-7,340/tonne, it indicated.

High stockpiles, weaker buying sentiment and lacklustre demand were factors behind MEG’s price declines, prompting stable-to-softer amines prices.

($1 = CNY6.14)

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