Trade Resources Industry Views US VAM Price to Rise Through Q1 Amid Tightening Supply: Sources

US VAM Price to Rise Through Q1 Amid Tightening Supply: Sources

The US vinyl acetate monomer market is seeing a tightening of supply that will likely push pricing higher through the first quarter of 2016 despite falling feedstock prices and a weaker energy sector, sources said.

US VAM increased $20/mt this week to a Thursday assessment of $970/mt FOB USG due to the supply tightness. The assessment is the highest since the end of September, Platts data show.

The firmer pricing runs counter to typical year-end trends, said a producer, adding that he had to turn down possible deals due to the tightness of supply.

"Normally at the end of the year you practically have to give it away," the source said.

The tightness is due to a wave of turnarounds in the third quarter and ongoing production issues in the US and overseas. The tightness will likely persist through the first quarter as turnarounds are planned for the start of the year, sources said.

LyondellBasell has been at a 100% allocation on VAM from its La Porte, Texas, plant after a force majeure declaration in November, sources say. Contract customers have been receiving material, but LyondellBasell has not been selling anything beyond that in anticipation of a tighter market and higher prices, a source said recently.

The facility has not been running at full rates since a third-quarter turnaround revealed maintenance issues, a distributor said recently.

The company did not respond to a request for comment.

Additionally, Dairen's 350,000 mt/year VAM plant in Singapore has remained shut due to a supplier force majeure, a source in the region said.

VAM pricing will likely be on an upward trend despite the state of crude prices and weaker feedstock prices, a source said.

Ethylene and methanol prices have declined since the previous high in VAM pricing on September 24. US spot ethylene has dropped 9.6% to Thursday's assessment of 17.625 cents/lb FD USG for front-month product. US spot methanol has dropped 30.5% from September 24 to Thursday's assessment at 62.50 cents/gal FOB USG for front-month product.

Source: http://www.platts.com/latest-news/petrochemicals/houston/us-vam-price-to-rise-through-q1-amid-tightening-21638426
Contribute Copyright Policy
Topics: Metallurgy