Buyers say demand is not there for Celanese VAM price increase

02 July 2013 22:06  [Source: ICIS news]

HOUSTON (ICIS)--US vinyl acetate monomer (VAM) demand is not strong enough to support a 3 cents/lb increase proposed by Celanese this week, buyers said on Tuesday.

“Celanese is wanting to sell more, but there’s no demand for that,” a buyer in Latin America said. “I don’t believe they can pass 3 cents/lb to the market.”

On 1 July, Celanese issued a VAM increase of 3 cents/lb ($66/tonne, €51/tonne) for the US, Canada and Mexico, and $70/tonne in Latin America, effective immediately.

Another buyer said production problems could be prompting the VAM hike, “because demand alone does not grant the increase”.

Celanese said it does not comment about production issues at plants. A market source said a large VAM supplier in the Americas was having issues at a plant coming out of a turnaround but did not specify the company or the location.

All five US VAM plants are in the Houston area.

US VAM spot prices remained at $940-1,040/tonne, sources said.

VAM quarterly settlements should come soon, sources said, pending the completion of a triple-month settlement in US ethylene contracts. Ethylene, a major feedstock, accounts for roughly 38% of the VAM price.

March remains the latest month for ethylene contracts, but sources said this week a combination settlement for March, April and May should come sometime in July.

Some VAM customers have said their contracts already have rolled over from the prior quarter.

US VAM producers include Celanese, DuPont, Dow and LyondellBasell.

($1 = €0.77)

By: Lane Kelley
+1 713 525 2653

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