China's amines demand growth seen stable-to-modest on weak economy

08 May 2014 09:59 Source:ICIS News

SINGAPORE (ICIS)--China's amines demand growth is expected to be stable-to-modest this year as the world's second-largest economy continues to lose momentum, market participants said on Thursday.

The demand for monoethanolamines (MEA) may grow to 80,000-100,000 tonne/year in 2014, compared with 80,000 tonne/year of consumption last year.

On the other hand, demand for both diethanolamines (DEA) and triethanolamines (TEA) are likely to remain stable this year at 80,000 tonne/year and 150,000 tonne/year respectively, they added.

"MEA demand may improve in the second half of the year but the overall demand growth is weak because of the sluggish economy," said one market participant in eastern China.

The Chinese economy continued to lose steam, as reflected in HSBC's final reading of its purchasing managers' index (PMI) for China, which rose marginally to 48.1 in April from 48.0 in March as output in the manufacturing sector fell because of fewer new orders.

The final April PMI reading was lower from its flash reading of 48.3, the investment bank said. A PMI reading above 50 indicates an expansion, while a reading below 50 denotes a contraction in manufacturing activities.

Production at Chinese manufacturers fell for the third consecutive month in April, though at a weaker pace than in March, according to HSBC. Domestic demand contracted at a slower pace in April, but remained tepid.

Supply wise, China is expected to face a burgeoning pool of supply availability from the Middle East, the market participants said.

Ethanolamines have applications in agrochemicals, surfactants, personal care and construction. MEA is produced by reacting ethylene oxide (EO) with ammonia.

By Felicia Loo