NPRA ’09: US VAM buyers expect price cuts in April

29 March 2009 23:41  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS news)--US buyers of vinyl acetate monomer (VAM) expect price cuts in April due to continued weakness in the paints and coatings sector, buyers said on Sunday at the National Petrochemical & Refiners Association (NPRA) conference in San Antonio.

They were looking for a drop in the contract price by 3-5 cents/lb, to 37-38 cents/lb due to little or no movement in downstream markets in recent weeks.

“We’re not seeing things get worse, but we’re not seeing any improvement,” a buyer said.

Another buyer said: “Nothing’s going to change until people get comfortable going out and shopping for houses again.”

VAM is a leading ingredient in architectural paints and coatings.

All of the five US VAM plants are in the Texas Gulf coast area near Houston. Buyers said all of the plants were operating at reduced rates.

One buyer worried that the recent run-up in crude prices to the $52-53 (€39-40) range signaled a return to the early-2008 speculative frenzy that pushed oil prices to $147.27/bbl in July.

“What I’m worried about is that the energy traders will drive oil up, which will shut everything back down again,” the buyer said.

A rise in February housing starts provided a boost for VAM market watchers, with the US Department of Commerce reporting that new home and apartment construction jumped over 22% from January.

A buyer said the next big news would be a jump in March housing starts.

 “Two months makes a trend,” the buyer said. “Everybody is just waiting on the housing market now.”

($1 = €0.75)

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By: Lane Kelley
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