Triethanolamine (TEA) prices in Asia declined during the first week of December 2024, driven by bearish trends in the upstream Ethylene Oxide market and subdued demand from the construction sector. The upstream Ethylene market, a key influencer of Ethylene Oxide prices, saw limited trading activity as elevated feedstock naphtha costs and weak downstream margins suppressed spot discussions in the TEA market. This upstream softness translated into reduced production costs for TEA, contributing to the overall price decline.

On the downstream front, the construction sector, a significant end-user of TEA, continued to grapple with challenges despite temporary improvements in China’s real estate market earlier in the fourth quarter. In October, government stimulus policies aimed at revitalizing the sector temporarily boosted home-buying activity, with key cities like Nanjing recording a 9% month-over-month increase in transactions by November 2024. However, this rebound failed to generate sustained demand for construction materials, such as cement, leaving the sector moderately subdued.

Seasonal factors further exacerbated demand weakness across the Asia-Pacific (APAC) region. In northern China, provinces like Gansu and Xinjiang experienced falling temperatures that halted numerous construction projects, curbing demand for downstream products like concrete, which directly impacts TEA consumption. Meanwhile, in southern regions, financial constraints and limited new project launches hindered year-end activity, deepening the slowdown in housing and infrastructure developments.

In South Korea, TEA prices also faced downward pressure, reflecting ongoing challenges in the construction industry and the broader economic downturn. The Ethylene Oxide market remained weak due to sluggish demand and persistent feedstock cost pressures, compounding price declines for TEA. The construction sector in South Korea showed continued weakness, as evidenced by the loss of 96,000 construction jobs in November, marking the seventh consecutive month of declines. This contraction, attributed to reduced construction orders and project delays, curtailed demand for construction-related chemicals, including TEA. Weak wholesale and retail demand further compounded economic pressures in the region.

These conditions, coupled with an oversupply of construction chemicals, have intensified competition, adding downward pressure on prices across the TEA value chain in Asia.

As per ChemAnalyst, TEA prices in Asia are expected to remain subdued in the near term as weak Ethylene Oxide costs and stagnant construction demand persist. Market participants anticipate continued volatility influenced by seasonal patterns, economic stimulus measures, and adjustments in supply dynamics, along with potential shifts in regional trade flows and changing industrial activity levels. The forecast for Triethanolamine prices at the year-end,  suggests continued downward pressure, as loose supply-demand dynamics persist. With most manufacturers increasing their operational rates over the past two months, a sluggish trading environment has emerged, characterized by transactions driven mainly by essential demand.