11 April 2014 23:59 [Source: ICIS news]
LONDON (ICIS)--European vinyl acetate monomer (VAM) April contract prices were assessed by ICIS on Friday at record increases of €295-475/tonne, reaching levels far above any previous monthly contract assessment.
April contract prices were assessed in the range of €1,280-1,580/tonne free delivered (FD) northwest Europe (NWE).
Prices were settled in a wide range, with producers adopting very different pricing strategies. Monthly contract prices have increased by a total of €475-745/tonne over the January-April period.
Producers indicated April contracts in the high €1,200s/tonne to the mid-€1,600s/tonne FD NWE. Although prices above the €1,400s/tonne could not be verified on the buy side of the market, a substantial proportion of the volumes sold into the European market were understood to have been priced towards the high end of this range.
Supply remains very tight in Europe on account of the continuing production constraints at US plants. Isotanks of Chinese origin were heard to be arriving, but some concerns were expressed about whether all of these volumes were compliant with European regulations.
A reseller said that it had sold a few trucks on the spot market at prices in line with last week's assessed range, but no other spot business was heard this week. The source suggested that buyers are hoping that supply will improve by the end of May, but it did not feel that this was likely.
A second reseller said that it had concluded most of its April contracts in the €1,400s/tonne FD, and did not anticipate any improvement in supply or significant price reductions in the next few months.
A buyer said that it had finalised its April contracts in the €1,300s/tonne FD. The source noted that import tonnes are coming from the Middle East, and said it had heard that spot prices were falling in response.
A second buyer said that it had concluded its April contract at €1,350/tonne FD. There is little material available for the spot market, the source said, and large volumes must be booked several weeks in advance.
A third buyer said that it had agreed to a contract in the low-to-mid-€1,300s/tonne FD, and suggested that producers are concerned about demand destruction.
There were indications of product substitution this week, with some acrylate esters suppliers seeing increased demand from customers that are reformulating away from VAM in favour of styrene-acrylics or pure acrylics.
A fourth buyer had yet to settle its April contracts, as it was not prepared to accept the prices it was being offered. However, the source noted that it was receiving more offers of spot volumes than before, although at prices that were too high for it to accept.
A fifth buyer said that it had received spot offers for May delivery just below €1,500/tonne FD this week. The source observed that three vessels have arrived this month and there is consequently less concern about supply in the market.
On the shipping market, a 5,000 tonne VAM cargo was fixed from Singapore to Antwerp for arrival in early April.
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