Taiwan’s Dairen Chem may further cut VAM output at Mailiao plants

31 May 2012 11:32  [Source: ICIS news]

SINGAPORE (ICIS)--Taiwan’s Dairen Chemical Corp may further cut operating rates at its two vinyl acetate monomer (VAM) plants in Mailiao next week to 60-70%, following a shutdown at an upstream cracker at the site, a company official said on Thursday.

Dairen’s 300,000 tonne/year No 2 and 350,000 tonne/year No 3 VAM plants in Mailiao have been running at a reduced capacity of 70-80% since the fourth quarter of 2011 owing to weak market conditions, the source said.

“There is sufficient ethylene stock for the time being so any cuts may take place next week,” he said, adding that the company is still determining the duration of the output cut.

The company’s VAM plants derive their ethylene feedstock from Formosa Petrochemical whose 1.2m tonne/year No 3 cracker in Mailiao was taken off line on Thursday.

Asia currently has ample VAM  supply and buyers are not inclined to stock up on inventory, market sources said.

"We will have to see the impact of the cuts in two to three weeks' time because nobody has any mood to buy spot cargoes unless in emergency cases," a key southeast Asia-based buyer said.

VAM spot prices in northeast, southeast and south Asia fell 2.2%-2.7% at low $1,100/tonne €891/tonne CFR (cost and freight) levels on 25 May, in line with losses in ethylene, naphtha and crude values.

Other major VAM producers in the Asian market include US-based Celanese, China’s Sichuan Vinylon Works, Japan’s Showa Denko and Japan VAM & Poval, South Korea’s Asia Acetyls Co (Asacco) and Saudi Arabia’s International Vinyl Acetate Co (IVC).

($1 = €0.81)

By: Helen Lee
+65 6780 4359

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