China domestic ethanolamines may edge down on soft demand

24 April 2018 04:39 Source:ICIS News

SINGAPORE (ICIS)--China’s domestic ethanolamines prices may edge down amid curbed buying, but the pressure could be countered by strong upstream costs.

For the week ended 18 April, local triethanolamines (TEA) prices were stable week on week at yuan (CNY) 10,850/tonne ($1,717/tonne) EXWH (ex-warehouse), according to ICIS data.

Monoethanolamines (MEA) and diethanolamines (DEA) prices were also stable over the same period at CNY9,950/tonne EXWH and CNY10,150/tonne EXWH, respectively, the data indicated.

The prices were down by about 4-5% from early March, after holding steady throughout February, ICIS data showed.

ICIS Editorial Chart goes here

Buying sentiment is likely to stay weak, with environmental restrictions curbing downstream production, resulting in reduced need for ethanolamines.

Trading momentum has failed to pick up as expected after the Lunar New Year holiday in late February, with end-users adopting a wait-and-see approach on the market.

End-users opted to use up their existing stocks for the whole of March, prompting losses in the domestic market.

“With local prices broadly constant in mid-April, consumers would not be in a hurry to procure large volumes,” said a trader.

On the import front, consumers preferred to be more careful given that China’s antidumping duties (ADD) probe on ethanolamine imports from the US, Saudi Arabia, Malaysia and Thailand is ongoing. Many opted to hold back on purchases where possible until there is more clarity.

“There is overall a cautious sentiment in the air for buyers and sellers,” a local seller said.

High upstream costs, on the other hand, may counter the soft buying sentiment to a small extent.

Feedstock ethylene oxide (EO) prices in China remained supported at CNY 10,600/tonne EXWH for the seventh week on 18 April, according to data compiled by ICIS.

Meanwhile, ethylene import prices in northeast Asia hovered at around $1,350/tonne CFR (cost and freight) NE (northeast) Asia throughout most of April, supported by robust demand in China.

This was about 9% higher than the weekly price of $1,235/tonne CFR NE Asia seen in early March.

ICIS Editorial Chart goes here

Recent gains in the ethylene markets and decent performance in other EO-derivative markets like monoethylene glycol (MEG) could provide upward pressure to the EO markets, which would, in turn, buoy ethanolamines spot prices, market sources said.

ICIS Editorial Chart goes here

Generally, local demand would be “a more critical factor” influencing domestic ethanolamines prices in view of the limited impact exerted by strong EO markets lately, some players said.

With ethanolamines supply currently long, local producers are likely to clear their inventories and operate at low rates for the time being.

However, sellers remain wary about lowering their offers further, considering that current margins were minimal or negative.

Ethanolamines are used in personal care and household products, detergents and herbicides.

Focus article by Kheng Wee Loy

($1 = CNY6.32)

Picture: A shelf full of detergents at a supermarket. (Photographer: Jochen Tack/imageBROKER/REX/Shutterstock)

By Kheng Wee Loy