Chemical Profile: Europe VAM

26 July 2013 08:47  [Source: ICB]


Vinyl acetate monomer (VAM) is used in water-based paints, adhesives, acrylic fibers, paper coatings and non-woven binder applications. Approximately 47% of VAM production volumes go into polyvinyl acetate (PVA), which is a primary molecule in paints, adhesives, and other coatings.

EU VAMApproximately 30% of the VAM output goes into polyvinyl alcohol (PVOH), which is used in packaging film and glass laminates.

The remaining percentage of VAM volumes go into ethylene vinyl acetate (EVA) polymers, ethylene vinyl alcohol (EVOH) barrier resins and polyvinyl butyral (PVB), which is used in automobile windows. EVA and EVOH are providing new areas for uses in co-polymers for specialty adhesives and packaging films.


Following the closure of its 150,000 tonne/year VAM plant in Pardies, France, in 2009, US-based Celanese announced in May 2013 that it was seeking buyers for its 200,000 tonne/year VAM unit in Tarragona, Spain.

The producer said its plan to sell the unit was the result of a recent assessment of its global manufacturing facilities, and that its strategy favours integrated production sites that provide critical economies of scale.

European demand for VAM was weak during the first half of 2013 because of a combination of macroeconomic weakness and an unseasonably cool spring. Availability has consequently been good, and there was only a limited impact on the market from Swiss-headquartered INEOS's declaration of force majeure in late December on supplies from its 300,000 tonne/year Hull plant in the UK. The force majeure was understood to be the result of a technical problem with a reactor.

European demand for VAM started to pick up early in the summer with the arrival of warmer weather. Many downstream applications are used in the construction industry, and activity in this sector usually slows down when temperatures are cool. As a result of the long winter, there is pent-up demand in the market.

Europe remains a structural import market, with 262,098 tonnes of VAM imported into the EU in 2012, according to data from statistics agency Eurostat. A total of 164,267 tonnes was imported into the EU during the first five months of 2013.


The majority of VAM business in Europe had moved to monthly contract pricing by the beginning of 2013, with only a few accounts still being priced on a quarterly basis.

March contracts were concluded at €845-875/tonne ($1,113-1,153/tonne) FD (free delivered) NWE (northwest Europe), €15/tonne above the January level, but had fallen to €805-830/tonne by May, reflecting a €160/tonne fall in the feedstock ethylene price over the same period. Second-quarter VAM contract prices fell by €40/tonne to €810-860/tonne FD NWE from €850-900/tonne in the first quarter. Acetic acid prices were fairly stable during the first half of 2013.

European spot prices followed a similar trend to the monthly contract prices, but have been consistently below the contract price level since the start of the year.

Spot prices started the year at €810-860/tonne FD NWE, rising to €835-865/tonne in March and falling to €780-800/tonne by early July.


Ethylene is the preferred feedstock, replacing the original acetylene route. VAM is usually produced by the catalysed vapor phase reaction of acetic acid with ethylene and oxygen in a fixed-bed tubular reactor, using a supported noble metal catalyst.

INEOS (formerly BP Chemicals) developed a fluidised bed technology, LEAP, where the catalyst is continuously removed and replenished, giving much longer run times. Celanese developed its VAntage process that it claims adds capacity equivalent to a worldscale plant at 10-15% of the cost of a grassroots facility.

EU VAMUS-based Praxair has patented the use of 99.95% oxygen to lower the amount of inerts in the reactor, reducing catalyst losses and boosting yields by up to 5%. US producer Eastman Chemical has developed a three-step liquid-phase process based solely on acetic acid that can give yields as high as 95%.


Global VAM consumption is expected to broadly track GDP growth. Annual global growth is predicted to be around 5% per year and concentrated in Asia, primarily China. No new investment is likely in Europe.

Market observers in China have indicated that domestic production capacity is growing faster than demand. In May, South Korea's Asia Acetyls Co (Asacco) pushed back the targeted commissioning date for its new 300,000 tonne/year plant in Ulsan to beyond 2015 from early 2014.

A company official explained that the project had been delayed because of weak export markets, owing to slow downstream construction activities.

By: Samuel Weatherlake
+44 20 8652 3214

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