Vulnerability Rises on Triethanolamine Prices as LyondellBasell and INEOS Closes Acquisition Deal

In the surprising turn of events, the Triethanolamine market in the USA prepared for a potential price shockwave, as the dominoes fell after LyondellBasell's (LYB) bombshell announcement on 8th December 2023 hit the market sentiments. The scarcity of availability of feedstock Ethylene oxide may be witnessed in the short term which could potentially surge the prices of Triethanolamine in the USA throughout December. The price surge of Triethanolamine was attributed to the announcement after the chemical giant agreed to sell its Ethylene Oxide and derivatives (EO&D) business, including the massive Bayport, Texas facility, to INEOS Oxide (INEOS) for 700 million dollars. This seemingly mild transaction has the potential to send trembles through the entire Triethanolamine (TEA) landscape in the USA, potentially driving prices to rise in the short term.

As per the recent assessment, the prices of Triethanolamine in the USA witnessed a decent hike of 1.2% in just one week to settle from 1235 USD/tonne to 1250 USD/ tonne FOB, Texas during the second week of December 2023, after the announcement of LyondellBasell which hit the market sentiments of the USA to sell their Ethylene oxide and Derivatives. Triethanolamine, a versatile chemical with applications across diverse industries like cosmetics, detergents, and cement additives, relies heavily on Ethylene oxide as a key feedstock. With the Bayport facility, a major source of Ethylene oxide in the US, changing hands, concerns are mounting about potential supply disruptions throughout December. INEOS, a UK-based company, may prioritize different production strategies or have different logistic considerations, leading to temporary hiccups in the flow of Ethylene oxide to existing Triethanolamine manufacturers. This could create a classic supply-and-demand imbalance.

As per ChemAnalyst, the Triethanolamine prices in the US market are expected to surge for a short period due to potential supply disruption of its feedstock, Ethylene oxide. However, The CEO of INEOS Oxide, Tobias Hannemann said in their latest interview that the purchase of Ethylene oxide and its derivative would complement the company’s existing Triethanolamine production facility, located in Plaquemine, Louisiana for a longer period amidst plant giving access to supply of cheaper US Natural gas and Ethane which eventually benefit the production cost of several commodity, including Triethanolamine. Moreover, the completion of the transaction is contingent upon the successful completion of scheduled facility maintenance and the fulfillment of customary closing conditions, including regulatory approvals as it is anticipated to close the ceremony in the second quarter of 2024.