Europe initial ethanolamine May prices talked firmer

LONDON (ICIS)–European monthly ethanolamine contract price talks for May are still in their early stages, although initial price indications are talked firmer on the back of higher upstream ethylene contract costs this month and recently.

Views on the magnitude of any possible upward price movement are varied, depending on source and market factors, said industry players on Wednesday.

Some producers and one trader are looking for around the cost ratio level and more, stating that they need to compensate for the higher upstream ethylene costs in May, as well as the underlying need to recoup lost margins from April in particular.

Price rises of €30-50/tonne were being talked for May by a few sellers over the past week, although it was still seen to be early in discussions to have a clear view on the outcome. One trader said it is discussing plus €50/tonne for May, but it expects plus €40/tonne to be more likely, although this remains to be seen.

One producer, however, said it had already concluded some May contract business with price rises ranging from €20/tonne to slightly above €40/tonne, depending on homologue. This seller typically quotes average prices for a mix of its monthly and quarterly contract business.

The same seller said that the lowest price rises so far were for mono-ethanolamines (MEA) in May, amid a well-supplied market, adding that price rises slightly above €20/tonne were possible for di-ethanolamines (DEA), on a better balanced market. The seller said that it had seen the highest price rises so far for tri-ethanolamines (TEA) in May, considering that TEA was not readily available as some buyers suggest.

Another producer also considered that TEA supply was tightening in Europe. As a result, the same seller said it had some success in passing on price increases of at least €10-20/tonne for its TEA contract business in early May.

Views on May pricing from buying and trading sources were not widely forthcoming this week. However, one customer said it had accepted only part of the cost ratio increase in May. It said this was because the higher upstream ethylene contract price in May was being weighed against what it considered to be flat demand and good availability for TEA.

European ethanolamine monthly contract prices were assessed in April at €1,220-1,280/tonne FD (free delivered) NWE (northwest Europe) for MEA and €1,270-1,310/tonne FD NWE for TEA and €1,080-1,100/tonne FD for DEA, according to ICIS.

Demand is relatively steady, with little to no signs of any seasonal pickup in activity evident.

Supply is sufficient to good, according to buying and trading sources. Producers, however, maintain supply is balanced to ample for DEA and MEA respectively, but that TEA is not readily available, although reasons for the latter were not specified.

One trader, who typically imports product from Russia into Europe said that it continues to bring in minimum volumes from Russia to Europe as it has done since the start of 2016, amid what it considered to be a moderate demand in Europe.

In related production news, one ethanolamines plant in southern Europe is back running normally again, following a recent plant maintenance turnaround, as confirmed by a company source late last week.