Europe June VAM contracts concluded at rollovers and decreases

13 June 2014 23:29 Source:ICIS News

LONDON (ICIS)--European vinyl acetate monomer (VAM) June contract prices were settled on Friday in a much narrower range than has been seen in recent months.

June contract prices were assessed by ICIS in the range of €1,370-1,450/tonne FD (free delivered) NWE (northwest Europe), down by €70/tonne at the high end.

Prices at the high end of the assessed range for May fell into line with those at the low end, many of which were rolled over into June.

Some accounts remain under negotiation, but most were heard priced in the high €1,300s/tonne to the mid-€1,400s/tonne FD NWE.

One producer said the market has stabilised, partly on expectations of increased imports from Asia, but it noted that many of these cargoes have been delayed. Consumers' inventories are low, it added, as they have been keeping to the sidelines in anticipation of lower prices.

A second producer said it sold three trucks on the spot market this week at €1,450/tonne FD NWE. It understood that the additional tonnes were required owing to the late delivery of product from other sources.

A reseller said its June contract prices were concluded in the mid-to-high €1,400s/tonne FD NWE, and emphasised that the market remains tight. Asian prices now determine price levels in Europe, it observed.

A second reseller said it had sold a small quantity of spot material this week in the low €1,300s/tonne FD, while a third said it was selling spot tonnes in the mid-€1,300s/tonne FD.

A buyer said it had accepted rollovers for its June contracts at €1,350/tonne FD NWE. Supply is quite good, the source said, and it was able to secure spot tonnes below the contract price level for June delivery. Offers are now being received at €1,150/tonne FCA (free carrier) for prompt delivery, it added.

A second buyer indicated June contract settlements in the high-€1,300s/tonne to mid-€1,400s/tonne FD.

A third consumer said it had accepted decreases of €20-30/tonne for its June contracts, bringing its prices into the low-to-mid-€1,200s/tonne FD, with some contracts still to be finalised. The buyer added that it was not receiving spot offers above the low €1,200s/tonne FD for prompt delivery.

A fourth buyer said it was still in discussions, but anticipated rollovers or small reductions.

A fifth consumer said it had been offered spot in the high €1,400s/tonne FD for June delivery, but Chinese material was available at prices in the €1,300s/tonne FD.

A sixth buyer said its June spot requirements had been covered at around €1,300/tonne FD, and it had bought spot for July delivery at a similar price level.

Spot prices were assessed stable on Friday in the range of €1,290-1,420/tonne FD NWE.

Upstream, LyondellBasell has declared force majeure on acetic acid supplies in Europe, a company source said on Friday afternoon. This followed the producer’s declaration of force majeure on US supplies on Tuesday. No official supply allocation is in place yet for Europe, the source said.

The producer's declaration of force majeure in the US was accompanied by an extension of its force majeure on VAM issued in March, citing utility and feedstock supply disruptions. LyondellBasell said both forces majeures would take effect immediately.

In late May, sources said LyondellBasell's 544,000 tonne/year acetic acid unit in La Porte, Texas, had gone down because of problems getting carbon monoxide (CO) delivered.

Since then, sources have said the plant is operating but at limited capacity. LyondellBasell's letter to its customers said it would contact them once the company had assessed its ability as a supplier.

In late March, LyondellBasell issued a force majeure on VAM from its 385,000 tonne/year La Porte unit because of a compressor breakdown.

DuPont also declared force majeure in March on VAM made at its 335,000 tonne/year plant in La Porte. Sources said this week the force majeure at that plant – now owned by Kuraray – would be extended through June.

In shipping fixtures this week, a 4,000-tonne VAM parcel was due to load in Singapore from 20 June onwards, for shipment to Antwerp.

By Samuel Weatherlake