August Contracts
European August ethanolamines contracts are still being negotiated, but several players expect prices to drop in September on the back of falling crude values.
Producers are targeting rollovers to slight increases on August contracts, depending on grade, because of the 30/tonne increase in upstream ethylene seen this month.
One manufacturer said it implemented 15-50/tonne increases on mono-ethanolamine (MEA) and tri-ethanolamine (TEA), with the larger hikes most likely to be seen on MEA as it remains tight.
This put its August MEA and TEA contract prices at 1,520-1,580/tonne and 1,470-1,560/tonne, respectively.
However, buyers say that summer holiday shutdowns, particularly in southern Europe, have slowed demand and there is very little activity happening. On top of that, many buyers stocked up in July and are now running down their inventories in August before re-entering the market in September.
A couple of traders and customers yet to settle are therefore confident of getting reductions this month, and certainly no increases.
ICIS prices are unchanged pending further settlement.
September Contracts
With falling crude prices expected to exert downward price pressure all through the value chain, many think ethanolamines prices will fall in September.
Buyers and traders also complain of prices being too high after spiking in the first half of the year when there were several supply issues, including unplanned shutdowns and difficulties shipping in imports from the US.
Now these issues are no longer a problem, and availability is improving as Russian producer Sintez has been back up and running at full rates for two weeks now after maintenance, and is now exporting into northwest and southern Europe again.
Imports
Imports from other regions are currently lacking, however, as weak demand in Europe makes the domestic market unattractive to international sellers.
Some importers also said that margins on upstream ethylene oxide (EO) in the US and Asia are much greater when used to produce glycols, so there is less availability from these regions.
However, a couple of hundred tonnes of Asian MEA has been sold in Italy and the Benelux region for somewhere in the low 1,400s/tonne, according to one trader.
Mono-ethanolamine
A few buyers and sellers see August MEA settling at around 1,470-1,500/tonne FD NWE, 20/tonne up from July because of the ethylene increase.
However, others say numbers will fall on weak demand, and one trader put August MEA contract prices at 1,400-1,450/tonne FD NWE.
However, the same trader said spot prices remained higher for the time being, in the high 1,400s/tonne, which put it in agreement with most other players seeing business conducted up to 1,500/tonne FD.
Despite the improved availability and softer buying interest, MEA is still considered a little short.
Di-ethanolamine
August di-ethanolamine (DEA) contracts have mostly settled in the 950-1,000/tonne FD NWE range so far, down slightly on July because of persistent weak demand.
Spot numbers are largely seen in the same range, although a couple of sellers say they can still do business slightly above this level. One trader said it sold a truck to one buyer for 1,040/tonne FD NWE this week, but admitted that this may not be representative of the wider market.
DEA remains long amid persistently weak demand.
Tri-ethanolamine
TEA is balanced but is the grade seeing the widest spread, with August contract prices heard ranging between 1,400-1,560/tonne FD NWE.
Most players that had already settled gave contract numbers in the mid-to-upper 1,400s/tonne, although again, one trader put August contract numbers at 1,400-1,450/tonne FD NWE, but said spot is in the high 1,400s/tonne.
Another trader put even put spot numbers in the low 1,400s/tonne, whereas others put prices on the merchant market as high as 1,580/tonne FD NWE.
A Turkish seller said TEA prices in the region are around $1,900/tonne FD, but that the market is tightening amid restricted availability from the US and Iran. However, because demand is soft and crude is falling, it still expects numbers to fall heading into September.
Feedstocks
European ethylene is stable, but firm on the back of balanced supply-and-demand fundamentals. Spot activity is limited as it is the peak of the holiday season, but growing concerns over the global economy have led to any remaining players adopting a wait-and-see position. The August contract price settled at 1,120/tonne FD NWE, up by 30/tonne from July.
European EO contract prices are expected to move up by approximately 25/tonne in August, largely in line with the formula pass-through level. For freely negotiated EO business, there is some slight variation away from the formula move in a few cases, with increases either side of the formula move and rollovers also heard.
The tone of the ammonia market remains firm. Yuzhny availability for this month is now more or less committed, with late August/early September tonnes concluded in the low-$500s/tonne FOB. Higher prices for next business is on the cards given strong demand from Europe, the US and expectations that Yuzhny availability will be impacted by maintenance turnarounds in September.
($1 = 0.70)
This week on ICIS ( www.icis.com):
10 Aug 11 10:59 INSIGHT: Prices likely to track down with oil
09 Aug 11 21:43 EU, US debt crises may hurt Germany's chemical growth group
08 Aug 11 16:26 Euro cracker margins rebound to peak 2011 levels
