China domestic VAM prices up 18% on supply concerns

07 January 2009 09:54  [Source: ICIS news]

SINGAPORE (ICIS news)--Chinese domestic vinyl acetate monomer (VAM) prices rose 18% this week from late-December levels on emerging supply concerns following widespread and ongoing production cutbacks across Asia that began in the second-half of last year, producers said on Wednesday.

Deals in eastern China were heard at yuan (CNY) 6,500-6,600/tonne ($950-965/tonne) ex-tank in the first week of 2009, up CNY1,000/tonne from late-December levels.

Prices started to climb after key Taiwan-based producer Dairen Chemical Corp shut its remaining VAM line in late December in a bid to stem the price plunge due to poor market conditions.

“Prices are up as supply has tightened since Dairen’s total shutdown at the end of December but supply concerns may be short-lived as soon as the global producer Celanese restarts its plant in Nanjing, China,” a Hong Kong-based producer said in Mandarin, citing fundamentally weak demand as a basis for the conservative outlook.

Celanese’s new 300,000 tonne/year plant at Nanjing, China, was shut down in December after running at a low operating rate of 40% since its start-up in early July, according to sources close to the company.

Major VAM producers in Asia include Celanese, Dairen Chemical Corporation, Japan VAM & Poval, Sichuan Vinylon, Showa Denko and Kuraray Company.

($1 = CNY6.84)

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By: Helen Lee
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