Price and market trends: US VAM buyers oppose Celanese price increase

12 July 2013 09:31  [Source: ICB]

Buyers claim demand is not strong. Meanwhile, second quarter US contract prices roll over

US vinyl acetate monomer (VAM) buyers on 2 July said demand is not strong enough to support a 3 cents/lb increase proposed by Celanese.

"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 turnound but did not specify the company or the location. All five US VAM plants are in the Houston area.

US VAM second-quarter contract prices settled at a rollover following a three-month agreement this week in feedstock US ethylene contracts, sources said on 3 July. Contract prices stayed at 58-61 cents/lb ($1,279-1,345/tonne, €985-1,036/tonne). While some customers have monthly contracts, those with quarterly agreements usually settle after the period is over and the latest monthly ethylene contract is determined.

A full three-month settlement for US ethylene was confirmed by sources on 3 July with April ethylene at 47.25 cents/lb, May ethylene at 46.25 cents/lb and June ethylene at 45.50 cents/lb. The settlement puts ethylene contracts 2.5 cents/lb lower than the previous settlement, which was completed in March at 48 cents/lb.

Ethylene accounts for about 38% of the VAM price. Some VAM customers have said their contracts already have rolled over from the prior quarter.


By: Lane Kelley
+1 713 525 2653



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