China's local amines prices to firm on tight feedstock supply

09 May 2014 03:31 Source:ICIS News

Focus story by Felicia Loo

Ethanolamines has applications in agrochemicals, surfactants, personal care and constructionSINGAPORE (ICIS)--China's domestic ethanolamines prices are likely to firm on prospects of price hikes in feedstock ethylene oxide (EO), whereby a slate of EO plant turnarounds will take place next month, market participants said on Friday.

The local prices of the homologues rebounded in the week ended 7 May following price declines in the previous reporting week.

In the local Chinese market, the monoethanolamines (MEA) discussions and trades rebounded to yuan (CNY) 10,800-11,000/tonne EXWH (ex-warehouse) during the week ended 7 May, up by CNY400-500/tonne from the previous week, ICIS data showed.

Meanwhile, the price discussions for diethanolamines (DEA) rose by CNY100-500/tonne to CNY11,300-11,600/tonne EXWH over the same period.

The prices included the deals for bulk DEA, which were done at CNY10,700/tonne DEL on cash-payment terms, or the equivalent of around CNY11,300/tonne on a drummed basis.

Prices of triethanolamines (TEA) increased to CNY12,200-12,300/tonne EXWH from CNY11,800-12,200/tonne EXWH in the previous week.

"There will be tighter supply of EO because of the upcoming maintenance," said one trader.

Prices of EO in eastern China remained stable during the week ended 7 May at CNY10,600/tonne EXWH, while EO prices in northeastern China stood at CNY10,900/tonne EXWH, according to market participants.

EO prices in the eastern seaboard have been hovering at CNY10,600/tonne EXWH levels since mid-January. Prices rose by CNY200/tonne in the second half of January in response to rising ethylene prices then, according to ICIS..

Besides the EO factor, supply of amines would further tighten owing to plant turnaround at a major producer.

Taiwan's Oriental Union Chemical Corp (OUCC) is on schedule to shut its 40,000 tonne/year ethanolamines plant at Nanjing, China, for a regular maintenance starting from late May, and the turnaround will last for a month. The Nanjing-based plant is being operated at 60% capacity.

However, other market participants said the price increases would be limited in view of the current sluggish Chinese economy which is chipping away demand for plastics.

"There is actually ample [ethanolamines] supply available," said one participant.

Notwithstanding an ongoing maintenance at another producer's plant in China, the homologues prices had declined previously before they gained momentum this week, and this underscored the weakness in demand, those market participants said.

"The limit in EO output will help support prices. Other than that, there is no big improvement in the market," said one market participant.

South Korea's Lotte Chemical is eyeing to resume operations its 50,000 tonne/year ethanolamines plant at Jiaxin city in China in mid-May, when scheduled maintenance ends. The plant was taken off line on 18 March for a regular turnaround spanning two months.

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

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

By Felicia Loo