Europe December VAM contracts roll over on weak demand

13 December 2013 23:59 Source:ICIS News

LONDON (ICIS)--European vinyl acetate monomer (VAM) December contract prices were assessed by ICIS on Friday as stable from November in the range of €805-835/tonne ($1,103-1,144/tonne).

The contract prices were concluded on a free delivered (FD) northwest Europe (NWE) basis.

Market sources confirmed that December prices were unchanged from November in nearly all cases, with seasonally weak demand counterbalancing the €30/tonne increase in the ethylene contract price.

The announcement that Celanese will close its 200,000 tonne/year VAM plant in Tarragona, Spain, is likely to support a firmer price trend in the early part of 2014.

Helm is expected to announce major price increases for January next week. This follows an announcement from Celanese last week that it plans to increase its list and off-list selling prices for VAM by €70/tonne effective 1 January.

One producer was doubtful that Celanese would be able to achieve its targeted January increase.

The source emphasised that VAM market fundamentals will change significantly from the beginning of 2014, and said it has already agreed to price increases with some consumers. VAM producers have found 2013 to be a very poor year, the source observed.

Buyers described a quiet market ahead of the holiday season, with one noting that its December requirements are 50% of its normal monthly volumes.

Another buyer said it expects to see a small price increase next month. A third said it is still negotiating its Q4 contract price and is anticipating a rollover from the third quarter.

A reseller said that some consumers are anxious about securing supplies in the wake of the closure of INEOS's 300,000 tonne/year plant in Hull and Celanese's plant in Tarragona.

Higher prices could provide increased opportunities for prospective importers of Asian material, the source said.

($1 = €0.73)

By Samuel Weatherlake