08 September 2011 20:43 [Source: ICIS news]
HOUSTON (ICIS)--US vinyl acetate monomer (VAM) spot prices have dropped 9% during the past week on declining demand in foreign markets, particularly in Latin America, sources said on Thursday.
A buyer said VAM exported from the US has been purchased in South America in recent weeks for as low as $1,100/tonne (€781/tonne).
The buyer said it was tough “watching demand falling” in some countries of Latin America, particularly in Mexico, one of the three largest destinations for US VAM exports this year. The other two are Brazil and Belgium.
Exports to Mexico plunged 39% in July year on year, from 7,569 tonnes in the same month of 2010, to 4,615 tonnes this year, according to data released by the US International Trade Commission. Exports to Brazil doubled, from 2,039 tonnes in July last year to 4,430 tonnes in July this year.
Sellers said the $1,100/tonne noted by the buyer was not a representative spot VAM price. “It’s clearly not the average,” one seller noted.
Prices across Latin America are higher than the $1,100/tonne figure, the seller said. A more representative spot range was $1,200-1,350/tonne.
Regardless, such prices represent a 9% decline from the current US VAM FOB export range of $1,375-1,425/tonne.
Continued weakness in the US economy and a weak paint season has made producers even more dependent on exports, the seller said.
Another seller said spot US VAM had declined because the “panic situation” in that market that developed earlier this year had calmed and was returning to prior levels.
In mid March, spot US VAM averaged $1,100/tonne. But over the next several months VAM took a wild ride on supply and feedstock issues, with spot prices jumping well over 40%.
The seller said scheduled maintenance in the autumn would probably raise US VAM prices.
Last week, DuPont said its VAM plant in LaPorte was undergoing maintenance, and most of the other producers also have turnarounds scheduled in the autumn, the seller said.
Major US VAM producers include Celanese, Dow Chemical, DuPont and LyondellBasell.
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