Europe ethanolamine market differs on July pricing ideas

02 July 2014 17:00 Source:ICIS News

LONDON (ICIS)--European ethanolamine producers are aiming for price increases in July given rising raw material prices, but buyers expect further declines given weak demand, sources said on Wednesday.

The ethylene contract price was confirmed up €50/tonne for July, putting further pressure on margins at ethanolamine producers. In response, producers hope to put up prices.

“We decided internally we have to push pricing through. It’s a mixed picture, with some customer it’s not a problem. We achieved +20-30 [€/tonne],” said one producer.

“There is an upward pressure right. It’s too early to say how successful it will be. If there is an increase it will be small. We are increasing prices slightly €10-20/tonne,” said a distributor.

However, buyers have different views on pricing movements.

“In Q3 we have a lower price compared to Q2. It’s 5-10 euro [/tonne] down. There is no issue of availability, with sufficient material. Where is the demand?” said one buyer.

“I have more product than I can poke a stick at,” said a second buyer.

The outcome is as yet unclear but few market players are optimistic that price increases will stick.

“Buyers understand the ethylene link. But the picture is spoiled if someone offers lower prices,” said the distributor.

"I think it’s always the same after an increase [in ethylene]. Everyone talks about higher prices but over the following weeks they give up and go back to lower prices, and that’s because of demand,” it added.

By Rhian O'Connor