China local amines prices to rise on tight EO supply

SINGAPORE (ICIS)–China’s domestic ethanolamines prices are likely to increase on the back of tightening supply and rising cost of feedstock ethylene oxide (EO) amid cracker turnarounds, market participants said on Monday.

On 2 March, diethanolamines (DEA) prices were assessed stable week on week at yuan (CNY) 7,100-7,900/tonne ($1,089-1,212/tonne)EXWH (ex-warehouse), including offers for bulk cargoes at CNY6,800/tonne DEL (delivered) on a cash-payment term, according to ICIS data.

Over the same period, monoethanolamines (MEA) prices rose by CNY100-300/tonne to CNY7,400-8,000/tonne EXWH and triethanolamines (TEA) price discussions edged up by CNY100-300/tonne to CNY7,700-8,100/tonne.

Prices of feedstock EO in China, meanwhile, increased by CNY300/tonne during the week ended 2 March to CNY7,200/tonne EXWH, rising for the first time since 25 November last year, ICIS data showed.

“The amines market is supported by higher EO prices. Rising MEG prices are also lending support,” said one market participant.

“EO prices are firmer because of cracker maintenance. Ethylene supply is getting tighter,” said another market participant.

Spot ethylene prices in Asia rose to levels last seen in December 2015, amid a supply crunch because of the turnaround season for regional crackers towards the second quarter.

Ethylene prices are also being underpinned by strong import demand from Japan, Korea and Indonesia, as well as rising downstream prices led mainly by the styrene monomer (SM) sector.

In the week ended 4 March, ethylene prices on a CFR NE Asia basis surged by $90-120/tonne to $1,050-1,120/tonne, while those on a CFR SE Asia basis rose by $70-120/tonne to $1,050-1,120/tonne, ICIS data showed.

In China, Sinopec’s Maoming Petrochemical has shut its 360,000 tonne/year cracker in Guangdong from 1 March, with maintenance to end on 6 April.

Wuhan Petrochemical will also conduct maintenance at its 800,000 tonne/year cracker in Hubei from 6 April to 20 May.

Meanwhile, China’s Sanjiang Fine Chemicals has shut a 60,000 tonne/year EO line in Zhejiang province as a result of insufficient feedstock ethylene.

Sanjiang Fine Chemical’s 380,000 tonne/year EO/monoethylene glycol (MEG) swing plant and two 200,000 tonne/year EO lines have remained operational at reduced rates, while its other two 60,000 tonne/year EO lines were shut since last year because of weak economics.

MEG prices on CFR CMP (China Main Ports) basis rose by $27-31/tonne to $680-690/tonne during the week ended 4 March, extending gains over the last two months as downstream polyester sectors in China began to recover ahead of the polyester peak period from April to May.

Moreover, MEG prices are supported by supply tightening as turnarounds are expected at major MEG facilities in March and April.

In the downstream ethanolamines market, cargo availability is getting tighter with limited offers by major producers owing to planned maintenance.

In Thailand, PTT Global Chemical (PTTGC) will shut down its 50,000 tonne/year ethanolamines unit in Map Ta Phut from 10 March to 12 April. The company shut its 1m cracker in Map Ta Phut on 22 February for around 40-45 days.

In Taiwan, Oriental Union Chemical Corp (OUCC) will be shutting down its 40,000 tonne/year ethanolamines plant at Yizheng in Jiangsu province, China, for a month-long maintenance from mid-March.

The turnaround will coincide with the maintenance of OUCC’s EO plant in Yangzhou. When fully operational, the plant can produce 400,000 tonnes/year of EO.

In Saudi Arabia, Saudi Kayan will take off line its 100,000 tonne/year ethanolamines plant in Al-Jubail in March for turnaround, which will span four to eight weeks.

The company is scheduled to have shut its 1.48m tonne/year cracker at the same site on 1 March for around 45 days of maintenance. Several downstream plants in the same complex will also be down during the same period.

Amines demand, on the other hand, is gradually picking up in China following the Lunar New Year holidays last month, market participants said.

There was little buying before the Lunar New Year as market players did not want to stock up inventories then given the widespread price volatility of crude futures, they said.

“But now with the shutdowns, there is less supply available and players are coming back to the market, though demand is mainly driven by tightening supply factor,” a market participant said.

($1 = CNY6.52)

Focus article by Felicia Loo