Dow Chemicals Puts Force Majeure on Triethanolamine Plant as Winter Snap Hits Production

In an unforeseen twist, the Triethanolamine prices are prepared for a potential uptrend in the US market at the end of January 2024, amidst a reduction in the supplies and plant outages. As per the notice released by Dow Chemicals, in the wake of the recent deep freeze event across the US Gulf Coast, the Dow Chemical Company ("Dow") has declared Force Majeure, citing severe disruptions to its Triethanolamine and Ethanolamines production facilities.

Dow is currently unable to fulfill quantities of Monoethanolamine (MEA), Diethanolamine (DEA), and Triethanolamine (TEA) as specified in the applicable Sales Contracts or Purchase Orders ("Contracts") due to the unforeseen consequences of the extreme weather conditions for the time being. The affected production sites are situated in Louisiana, Seadrift, and St. Charles, Texas (USA). Freezing temperatures in the region have caused significant damage to Dow's Ethanolamines production facilities and utility infrastructure at these locations, rendering them to be temporarily closed.

The freeze event has not only disrupted Dow's production capabilities but also raised concerns about the broader impact on the supply chain and industries dependent on Ethanolamines including Triethanolamine production facilities. Intense winter conditions have forced the closure of approximately 15% of the oil-refining capacity in the US Gulf Coast, disrupting a crucial center for processing crude oil and facilitating exports including Triethanolamine. According to the latest analysis, a US Gulf Coast in Texas shut down port operations due to a severe winter storm causing snow and rain across most parts of the region for this time frame, restricting the movement of cargo and leading the prices of Triethanolamine to surge.

Additionally, the Red Sea conflicts, along with changes in shipping routes and disturbances in vital canals like the Suez Canal and the Panama Canal, have also triggered supply chains issues, affecting the manufacturing and transportation of chemical commodities like Triethanolamine. Presently, the increased transit times and logistical hurdles that have ensued are fueling uncertainties in Triethanolamine supply chains, thereby exerting additional influence on the dynamics of the Triethanolamine and Ethanolamine markets significantly.

As per ChemAnalyst, the Triethanolamine prices are expected to increase in the coming weeks, due to a shortage of inventories and an increase in the number of plant outages. The worsening effect of weather conditions on production activities may impose a bullish market situation and increase the US Triethanolamine prices for the short term. Additionally, Dow is expected to not to able to fulfill quantities of Triethanolamine (TEA) as specified in the applicable Sales Contracts or Purchase Orders ("Contracts") amidst plant turnarounds due to the unforeseen consequences of the extreme weather conditions.