China amines seen stable as Lunar New Year approaches

Focus article by Felicia Loo

SINGAPORE (ICIS)–China’s domestic ethanolamines prices are seen largely stabilising after having declined earlier in the month amid weak demand and ample supply, as business activities wind down ahead of the Lunar New Year, market participants said on Thursday.

End-users’ interest in restocking is largely lacking in the weeks leading to the festive season in the second half of February, they said.

“Business remains the same. Demand is poor and now that we are approaching the Lunar New Year, there is not much activity,” said one market participant.

China will be on holiday on 18-24 February for the Lunar New Year festivities.

On 28 January, prices of monoethanolamines (MEA) were assessed unchanged at yuan (CNY) 7,500/tonne ($1,200/tonne) ex-warehouse (EXWH) in east China, but were down by about 12% from four weeks ago, according to ICIS.

Domestic prices of diethanolamines (DEA) in China fell by CNY300/tonne at the high end of the range this week to CNY8,000-8,400/tonne EXWH east China in response to sluggish buying needs from the glyphosate sector. From four weeks ago, DEA prices fell by 9%.

Meanwhile, on triethanolamines (TEA), local Chinese TEA prices were assessed stable at CNY8,500-9,000/tonne EXWH east China during the week ended 28 January, but down by about 14% from a month ago.

Prices stabilised because of lower production in China, market participants said.

“There are run cuts and plant maintenance going on, so less supply is being offered in the market,” a second market participant said.

In Jiaxin city, a 50,000 tonne/year ethanolamines plant of South Korean Lotte Chemical was taken off line for regular maintenance from 20 January.  The turnaround will end 10 February.

The turnaround is taking place in tandem with a routine maintenance at the company’s 130,000 tonne/year ethylene oxide (EO) unit that is located at the same site.

Prices of feedstock EO in eastern China were quoted at CNY7,000/tonne EXWH during the week ended 28 January, representing a 35% slump from November 2014.

Demand for ethanolamines was hit by China’s slowdown as downstream requirements from the construction and surfactants sector weakened, market sources said.

The country posted its weakest growth in 24 years at 7.4% in 2014, lower than its full-year target of 7.5.%.

Ethanolamines also has applications in agrochemical and personal care sectors. MEA is produced by reacting EO with ammonia. The chemical reaction also produces DEA and TEA.

There is room for amines prices to fall further after the Lunar New Year on signs of declines in ethylene prices.

Ethylene spot prices in northeast Asia fell by $10-40/tonne during the week ended 23 January to $880-920/tonne CFR (cost and freight) NE (northeast) Asia, ICIS data showed.

Spot ethylene prices in southeast Asia declined by $30/tonne to $890-900/tonne CFR SE Asia over the same period.

($1 = CNY6.25)

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