06 June 2012 21:33 [Source: ICIS news]
The drop in VAM FOB (free on board) export prices to $900-1,000/tonne from $975-1,075/tonne previously, marked the second spot drop in less than a month.
Spot prices for VAM feedstock US ethylene cratered to a 15-month low in recent weeks, at 46.50 cents/lb, pulled down by looser supply, weaker demand and sharply lower feedstock prices.
This week, ethylene contracts for May settled at 46.25 cents/lb, dropping by 9 cents/lb from April. It was the sharpest monthly drop since November 2008 in the wake of the global financial crisis that year.
VAM buyers in Latin America said the export range was lower, at $850-950/tonne. But US sources said the more representative range was somewhat higher because of the greater percentage of shipments outside of Latin America.
Among the top 10 US VAM export destinations through March this year, Canada, China and European countries received almost double the shipments - 68,166 tonnes - compared to 35,653 tonnes received by South American countries, according to data from the US International Trade Commission.
One VAM buyer said the VAM/ethylene drop signalled a broader decline at work in the chemical industry.
“I think this is just the market being weak,” the buyer said. “Demand is slow, and it’s slow down the whole (ethylene) chain.”
Major US VAM sellers include Celanese, Dow Chemical, DuPont and LyondellBasell.
($1 = €0.80)
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