Price and market trends: Second US VAM force majeure declared, this time by LyondellBasell

24 March 2014 00:00 Source:ICIS Chemical Business

LyondellBasell on 13 March declared force majeure on vinyl acetate monomer (VAM) produced at its Texas plant, the second such declaration by a US producer this month.

The declaration resulted from “an unplanned mechanical breakdown of a compressor,” the producer said in a 13 March letter to customers. “Accordingly, we must declare a force majeure event for VAM, effective immediately.”

LyondellBasell’s letter did not specify the location, but the company’s only US VAM plant is its 385,000 tonnes/year unit in LaPorte, near Houston.

Lyondell’s move is just the latest big announcement in what has been an eventful month for US VAM producers, with every producer citing production issues in recent weeks.

DuPont declared force majeure at its plant in La Porte the previous week because of a major outage.

Celanese issued a sales allocation for VAM and feedstock acetic acid in North, Central and South America and Europe in a 6 March announcement. A source close to the company said that Celanese’s Bay City, Texas plant was having problems, although its Clear Lake, Texas VAM unit was operating at normal rates.

Dow Chemical has also had problems at its 365,000 tonnes/year Texas City VAM plant, with a source close to the company saying earlier this month that the global market had tightened so much on VAM that Dow could not take spot orders at the plant and could only serve contract customers.

In late February, Dow announced an 18 cent/lb price increase, citing increasing demand and higher raw material costs.

VAM FOB prices have shot up 33% so far this year, rising to $1,335-1,435/tonne earlier in the week ending 14 March, the fourth increase in a little over a month.

By Lane Kelley