Price and market trends: Buyers critical of Dow US VAM hike

26 July 2013 08:45  [Source: ICB]

US-based Dow Chemical's proposal to raise US vinyl acetate monomer (VAM) prices by 3 cents/lb ($66/tonne, €51/tonne) puzzled buyers, most of whom said it made no sense considering the recent drop in a key feedstock.

In a customer letter dated 16 July, Dow said the increase was effective immediately but did not give a reason. The hike applies only to VAM in North America.

A buyer cited the recent three-month settlement in ethylene, which was a 2.5 cent/lb decline from the previous settlement, as a reason for doubt.

"I don't get this one," the buyer said. "They aren't called the Callous Dowboys for nothing."

VAM buyers in the week ended 12 July criticised a similar nomination by Celanese, saying demand was not strong enough to support a hike.

VAM spot FOB export prices held steady during the week ended 12 July at $940-1040/tonne.

Besides ethylene, another VAM feedstock - acetic acid - dropped $25-50/tonne on the restart of a Celanese plant in Clear Lake, Texas, that had been down for repairs following a maintenance turnaround.

"It makes no sense," another buyer said of the Dow nomination.

Major VAM producers in the US besides Dow include Celanese, DuPont and LyondellBasell.

By: Lane Kelley
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