18 April 2011 22:27 [Source: ICIS news]
HOUSTON (ICIS)--Celanese declared force majeure (FM) on US vinyl acetate monomer (VAM) because of a disruption at a Texas plant of a critical supplier, the company told customers in a letter on Monday.
Combined with another move by the company in Europe last month, Celanese FM declarations on VAM have covered much of the globe in the past three weeks.
Celanese told European customers in a letter dated 25 March, that a temporary disruption at its Nanjing, China, acetic acid plant had forced the extension of a previously announced China allocation and FM into the European market and Asia outside of China regions.
The latest FM, explained in a letter dated 18 April, said there had been an “unexpected disruption in supply from a critical supplier” at Celanese’s VAM plant in Bay City.
The letter said the company was imposing an immediate 65% sales allocation for customers, with allocation levels based on the average of the last six months of purchases between October 2010 and March 2011.
“This will tighten the market up,” said a VAM customer who received the letter. US buyers have said material has been readily available for most of this year.
Celanese did not identify the supplier in the letter. A Celanese spokesman said the company did not talk about the operational status of its plants.
US VAM’s major feedstocks are acetic acid and ethylene. Celanese is one of the world’s largest producers of acetic acid.
Buyers in Europe last week said that they were informed that they would be placed on a 60% acetic and 50% VAM allocation for May and June, according to ICIS.
“This is definitely going to make life interesting for some people,” the buyer said. “It won’t impact our business, but it will on the smaller and medium-sized customers.”
Another US VAM producer, LyondellBasell Acetyls, put its customers on 100% allocation in mid-March because of plant problems and rising raw material costs, according to a customer letter.
The Celanese and LyondellBasell moves, in addition to a two-week turnaround at a Dow Chemical US VAM plant, have driven US VAM prices up in April, a supplier said on Monday. The Dow plant restarted last week.
The supplier’s company raised VAM prices by 5 cents/lb in the past week because of a “super, super-tight” supply situation in the US, the supplier said.
The supplier said demand was improving slowly, and the firm also was picking up new customers because of other producers’ problems.
“We are basically sold out for April and May,” he said. “The prices are really there.”
US VAM spot prices have risen $100/tonne in the past month, now at $1,150-1,250/tonne (€794-863/tonne).
The supplier said spot prices have jumped to $1,260-1,345/tonne, but it could not be confirmed.
All five US VAM plants are in the Houston area. US VAM producers include Celanese, Dow, DuPont and LyondellBasell.
For more on vinyl acetate monomer, visit ICIS chemical intelligence
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