Tight supply of European VAM driving increased spot prices, which have been set at €1,600-€1,900/tonne free delivered northwest Europe; contract prices may increase significantly in April, but not up to levels currently seen in spot market
LONDON , April 16, 2014 (ICIS Chemical Business (CBNB Abstracts)) – The very tight supply of European vinyl acetate monomer (VAM) in the market has resulted in increased spot prices for VAM. Spot prices have been set at EUR 1600-1900/tonne free delivered (FD) northwest Europe (NWE), a decline of EUR 50/tonne at the low end and a rise of EUR 200/tonne at the high end. Since 14 Feb 2014, VAM spot prices have increased at the high end of the range by EUR 1000/tonne. Contract prices for Mar 2014 increased by EUR 120-200/tonne from Feb 2014 to EUR 985-1105/tonne FD. One producer had sold two bulk parcels on the spot market at a price close to EUR 1700/tonne FD, which is scheduled for delivery in 2H Apr 2014. Another sold a single truck at close to EUR 2000/tonne FD for late-Apr delivery, while sales had been concluded in southern Europe above EUR 1900/tonne FD. It is projected that VAM will remain tight throughout2Q 2014, although supply may not be fairly limited so much amidst the slightly increasing demand in Europe. A producer reported that it has sold out of material and claimed that the high-demand season is starting with speculations that tonnes are being sold at $1700/tonne FOB (free on board) in Asia. It is also projected that Apr 2014 contract prices may increase significantly, but not up to the levels currently seen in the spot market. Dow Chemical's Texas plant in the US has been beset with problems, and Celanese is implementing sales allocation. LyondellBasell and DuPont made force majeure declarations on VAM supplies from their US plants in Apr 2014.