Northwest European spot prices for vinyl acetate monomer tumbled Eur70/mt Thursday under pressure from Asian imports, according to Platts data. The European spot price for VAM was assessed at Eur1,560/mt FD NWE ($2,162.63/mt), down from Eur1,630/mt.
One source said Asian prices will set the NWE price as Europe remains reliant on imports to satisfy domestic demand. Asian VAM prices were assessed at $1,385/mt CFR China and $1,625/mt CFR Southeast Asia.
Another source said traders looking to import material from Southeast Asia into Europe would be looking at healthy margins even after the drop in NWE spot prices. "Taking the CFR SEA marker, after exchange rates we're looking at just under Eur400/mt to account for freight, duties and logistics," one source said. "That still leaves a healthy profit margin for importers."
European spot VAM prices hit a first-quarter peak of Eur1,675/mt FD during the first week of April.
The Q1 increase in VAM prices came after Celanese and Ineos closed their European VAM production lines last year, combining to take a total nameplate capacity of 500,000 mt/year out of European production.
The price outlook for European VAM remained a point of debate. One source said: "May will see a drop in prices as VAM cargoes arrive, but when this wave dries up and VAM users await further imports, we will see price rises again in July. We need a consistent flow of material from Asia to relieve the volatility."
Another source said prices were unlikely to decrease in the second quarter and anticipated higher prices as early as June. He cited plant maintenance works in the US and Taiwan's Dairen VAM facility in Mailiao going into turnaround in August, reducing the amount of Q2 imports into Europe. "Asian material can supply consumers in Europe, but for how long, remains uncertain," the source said.
