28 June 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European second-quarter contract prices for vinyl acetate monomer (VAM) were assessed by ICIS in the range of €810-860/tonne on Friday, down by €40/tonne ($52/tonne) from the first quarter.
The contracts were assessed on a free delivered (FD) northwest Europe (NWE) basis.
The decreases were based on a combination of falling feedstock ethylene costs and lower-than-expected demand for what is usually peak season for VAM consumption in Europe.
Price movement from the first quarter was indicated at rollovers to minus €60/tonne. The assessed range for monthly contracts was lowered by €40-45/tonne over the course of the second quarter. The majority of VAM contracts are now priced on a monthly basis.
The conclusion of the July ethylene contract price at a rollover of €1,170/tonne FD NWE was in line with VAM market participants' expectations.
A producer said it was in the process of concluding its July VAM contracts at rollovers and modest decreases from June. The source said this was due to competitive pressure in a weak market, but noted that demand is picking up slightly.
The seller added that its customers were receiving spot offers as low as €760/tonne FD, probably for material of Russian or Ukrainian origin.
However, a reseller based in eastern Europe said it was not aware of product being offered into western Europe at such low prices.
Another producer said it had settled most of its July spot business at June price levels. The source indicated spot prices around €800/tonne FD NWE and described stable demand.
A reseller said it had sold truck loads this week at prices just below €800/tonne FD France and Germany. The source described a very weak market in which even regular spot market participants are purchasing less material than in previous years.
A buyer said that demand is not looking too good and shows no signs of improvement for July. An Italian buyer said demand in the region is very poor.
Sources indicated that demand was stronger in June than in previous months, but remains well below the expected level for the time of year. One buyer said its offtake was down by 8-10% from the same period in 2012.
European spot prices were assessed on Friday in the range of €780-820/tonne FD NWE.
($1 = €0.77)
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