Europe September ethanolamine price sentiment firmer on costs, supply

30 August 2017 17:15 Source:ICIS News

LONDON (ICIS)--The initial price sentiment for European ethanolamines in September is firmer on the back of lower availability and higher upstream ethylene contract costs, sources said on Wednesday.

Tighter supply in the European ethanolamines market is due to import disruption from the US as a consequence of Hurricane Harvey’s disruption in the Gulf Coast, as well as maintenance turnarounds in Europe and Russia.

There are also some other logistical challenges such as the extended closure of the Rhine valley rail route and talk of a supply chain disruption for a supplier outside of the region, which is also making the supply situation difficult.

On top of the logistical/supply-related constraints, the increase in the upstream ethylene contract price for September could also contribute to a firmer a tendency for ethanolamines next month.

Initial price indications for September range from increases of cost ratio level as a minimum to larger rises of up to €100/tonne.

Some players said an upward price movement of around cost ratio and slightly above, if not the full ethylene cost increase is likely for contracts, and a larger rise for spot in September.

One trader acknowledged that larger price rises are likely in the UK in September compared to August because of the combined effect of lower availability along with the need to compensate for weakness in the pound against the euro and the US dollar.

European ethanolamine contract prices in August were assessed at €1,300-1,350/tonne FD (free delivered) NWE (northwest Europe) for MEA, €1,120-1,150/tonne FD NWE for DEA and €1,330-1,380/tonne FD NWE for TEA 99%, according to ICIS.

By Heidi Finch