Dow puts US VAM on sales control ahead of February price hike

30 January 2013 22:15  [Source: ICIS news]

HOUSTON (ICIS)--Dow Chemical has put US vinyl acetate monomer (VAM) and about a dozen other products on sales control, according to a customer letter obtained on Wednesday.

The move comes ahead of big 1 February increases in some products. Dow announced a 6 cents/lb ($132/tonne, €98/tonne) hike in VAM for that date, and also a similar increase in US methyl methacrylate (MMA).

Dow’s 29 January letter gave no reason for the sales control and said it would apply to VAM and 13 other products in the company’s performance monomer portfolio, most of them acrylates.

“Unless otherwise required by individual contract terms, order control volumes will be determined for each customer by such customer’s monthly average of purchase volume over the past six months or will be restricted to the monthly maximum Dow is contractually obligated to sell,” the letter said.

One common denominator among the chemicals listed in the Dow letter is that they are made with feedstocks ethylene, propylene or methanol.

Spot prices for two of those feedstocks ethylene and propylene have each seen double-digit percentage increases in January.

Two buyers said the only reason they could think of for the move is that Dow is using the sales control to support the February price hikes, or “to enforce the announced increases,” as one said.

Dow did not immediately return a call seeking comment.

US VAM spot prices this week were assessed by ICIS at $1,000-1,100/tonne.

($1 = €0.74)

By: Lane Kelley
+1 713 525 2653

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