US VAM Q3 contracts fall 1-2 cents/lb on ethylene

01 October 2013 23:05  [Source: ICIS news]

HOUSTON (ICIS)--US vinyl acetate monomer (VAM) third quarter contracts slipped by 1-2 cents/lb as October began following a key feedstock on Tuesday.

The ethylene settlement put third-quarter US VAM contracts at 56-60 cents/lb ($1,235-1,323/tonne, €914-979/tonne) from the previous 58-61 cents/lb.

VAM demand often drops after the end of the paint season, though it has been lacklustre at best for most of the year. VAM is a key ingredient in architectural coatings.

With the rollover of US September ethylene contracts, initial VAM third-quarter contracts declined by 1-2 cents/lb, according to most sources.

VAM quarterly contracts historically have settled at the end of the period, following settlement of the latest ethylene monthly contract. US ethylene contracts usually settle at the start of the month for the previous month.

Ethylene contracts ranged 45.5-46 cents/lb during the July-September period. However, spot ethylene prices, which also impact VAM formulas, dropped from a high of 58 cents/lb in early July to a low of 51 cents/lb late last week and to 47.5 cents/lb this week.

VAM buyers noted that ethylene-based formulas called for reductions of 1-3 cents/lb. One supplier put the VAM reduction at 0.5 cent/lb.

($1 = €0.74)

By: Lane Kelley
+1 713 525 2653

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