Explosion at Dow Chemical Plant Sparks Surge in US and European Ethanolamine Prices

The price trend of Ethanolamine in North American and European markets surged during July amid supply disruption by Dow's Chemical plant located in Louisiana to settle at 1418 USD/ tonne Triethanolamine FOB Texas within a 5.2% hike and 1099 USD/tonne Monoethanolamine FOB New York after witnessing 6.9% rose respectively.

A fire at a Dow Chemical plant significantly impacts the US Ethanolamine market. The unexpected fire on July 14 at Dow's Glycol 2 units, followed by multiple explosions which are in the South of Baton Rouge, Louisiana, that burned till 5 a.m. on July 16, affected the production unit of several commodities. Dow in Plaquemine, Louisiana, US, put their feedstock Ethylene Oxide plant on unplanned shutdown with a 320,000 MT/year capacity on July 14 2023 amid a Glycol II unit explosion. The massive explosion at the plant location hampered Ethanolamine production within the USA. Not only in the USA, but the aftereffects of supply disruption also influenced the trading atmosphere of the German market too. This is because Dow Chemical is a major producer of Ethanolamine, a chemical used in various industries, including construction, textiles, and pharmaceuticals. Hence, the fire at a Dow Chemical plant disrupted the production of Ethanolamine, which would lead to a surge in prices as Ethanolamine is a relatively scarce chemical, and there are not many other producers of it.

Likewise, Dow Chemical could not produce Ethanolamine, which would lead to a shortage in the US market, eventually driving the prices up. Moreover, the fire also damaged the plant's infrastructure, which would make it even more difficult to resume production of Ethanolamine. This would further exacerbate the shortage and drive-up prices even higher. Considering the current situation to implement safety concerns, authorities of Dow Chemical plant have decided to put the production unit on hold for some time, which could influence the supplies of Ethanolamine in the future. After analyzing the whole situation, market players increased the posted prices of derivatives of Ethanolamine to remain profitable in the US market.

According to the Louisiana Department of Environmental Quality, a recent survey showcased Ethylene Oxide's presence on the Mississippi River's water sample after an explosion at the plant. The fire would also harm the environment, while the analyst announced that Mississippi's water quality does not get severely affected.

As per the data revealed to ChemAnalyst, the price trend of Triethanolamine and Monoethanolamine is expected to remain high during August to compensate for the production cost, which would suffer due to supply disruption.