Europe ethanolamines producers optimistic of price increases

30 July 2014 16:05 Source:ICIS News

LONDON (ICIS)--European ethanolamines producers are hopeful of increased prices in August amid a backdrop of lower imports and good demand, sources said on Wednesday.

Producers said there had been relatively healthy demand in July after several months of slower sales.

“Traditionally we expect August demand to drop, but July was the strongest month of year. Over all industries and all homologues, demand was around 10% above normal values. We do not see reduction in demand,” said one producer.

In addition, imports are said to have reduced. This is especially true from Russia where lower supply of ethylene oxide has resulted in lower ethanolamines production at Sintez OKA.

Sintez’s plant in Dzerzinsk, Russia has a capacity of 40,000 tonnes/year of ethanolamines. A company source confirmed: “Sintez OKA are planning to restart our ethanolamines plant in early August”.

Other imports have also been reduced.

“Imports are reduced as the price was so low for two or three months,” said one distributor.

“There is less material coming in but the market is quiet,” said a second distributor.

As a result of this, the market is said to be somewhat balanced, and producers are trying to increase prices to compensate for the margin squeeze seen over the past few months, when ethylene costs went up but ethanolamines prices down.

“We see the momentum to drive price increases,” said the first producer.

“We have increased prices already to a certain extent,” said a second producer.

“I can feel prices are strengthening. Demand is good. It is tight getting it. There is always one or two days delay,” said a consumer.

However, others in the market see less possibility of increases.

“I will try for price increases but will be difficult. I think rollover is the best I can do,” said the second distributor.

“We absolutely see less demand in August due to summer holidays especially in the south of Europe, which puts pressure on the producers to place material with customers who are still buying,” said a third distributor.

Either way, it may take some time before the true impact of the price nominations is seen.

“Producers can nominate price increases. Whether it will be accepted will have to be seen in September. Volumes will not be representative in August,” said the first distributor.

July prices were assessed primarily at a rollover, with both monoethanolamines (MEA) and diethanolamines (DEA) unchanged. Triethanolamines saw some further downward price pressure and prices were reduced by €20/tonne at the top end and were assessed at €1450-1500/tonne FD NWE (free delivered northwest Europe).

By Rhian O'Connor