Buyers shrug off global VAM 3-cent increase proposal

18 May 2009 22:43  [Source: ICIS news]

HOUSTON (ICIS news)--Dow Chemical's proposal to raise vinyl acetate monomer (VAM) prices globally by 3 cents/lb or $66/tonne (€49/tonne) drew mixed reviews from buyers on Monday.

A small buyer called the announcement a purely defensive move intended to stop further price cuts.

"I don't think it will go through," the buyer said. "Last I was aware, ethylene prices were not rising, so I don't know what the basis for Dow's increase would be."

Feedstock ethylene prices have dropped 1.5 cents/lb since February. In April, contract prices fell to 30.5 cents/lb, where they are now.

Another buyer questioned the size of Dow's proposed increase but said the producer might get half of the increase.

"I have a hard time believing they will get the full 3 cents/lb through," the buyer said.

Dow's announcement also called for an increase of 4 cents/lb on methacrylate and specialty monomer prices. It said both proposals were prompted by "continued pressure on margins experienced in all regions".

US VAM contract prices during the week ended 15 May were assessed at 42-47 cents/lb and FOB (free on board) export prices at $750-850/tonne, according to global chemical market intelligence service ICIS pricing.

($1 = €0.74)

For more on vinyl acetate monomer, visit ICIS chemical intelligence
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By: Lane Kelley
+1 713 525 2653

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