Asia VAM seen steady-to-firm as China exports in trickles

SINGAPORE (ICIS)–Spot vinyl acetate monomer (VAM) prices in Asia are well supported, with a possible upside, as supply of competitively-priced cargoes from China is scarce, industry sources said on Friday.

An unconfirmed deal was heard concluded for a 500-600 tonne regional cargo for May shipment at $900/tonne CFR (cost and freight) SE (southeast) Asia, but the cargo was not bound for a major port and will have to incur higher freight rates.

“Southeast Asia cargo could possibly be done at $900/tonne CFR SE Asia as prices are going up, but we don’t expect it to reach this level so soon,” a southeast Asia-based buyer said, adding that it was awaiting other offers first before booking June shipments.

On 29 April, VAM spot prices were assessed at $860-880/tonne CFR SE Asia and at $920-950/tonne CFR south Asia, ICIS data showed.

VAM exports from China have been limited since April, with a major plant running at reduced capacity, market sources said.

Offers for China-origin cargoes this week were limited to smaller iso-tank lots instead of bulk, as suppliers were managing their inventories on hopes of securing better prices, market sources said.

India imports VAM from China but the cargoes are subject to a 7.5% duty. This week, duty-exempt Asian material for June shipments were offered to India at $960-970/tonne CFR (cost and freight).

A key Asian supplier is seeking a $10-20/tonne hike for June shipments for India and southeast Asia markets, following unsuccessful attempts over the past two months to adjust up prices as available cargoes then were sufficient to meet demand.

The supplier plans to reduce its June sales volumes to regular customers, while another seller had been reluctant to supply substantial volumes for May shipment because prices are low compared with June cargoes.

“[The] overall prices will still range within $930-960 CFR India unless there’s a big cargo coming from China,” said an India-based buyer. The buyer hopes to obtain more quotations next week for second-half June shipments.

VAM supply coming from China has been tight, with a major plant running at reduced capacity.

Sinopec Great Wall Energy’s 450,000 tonne/year calcium carbide-based VAM plant in Yinchuan, Ningxia province, is operating at 50-60% of capacity due to plant equipment-related issues. The plant has been running at reduced rates since mid-April, a company official said.

Sinopec Shanghai Petrochemical, on the other hand, had a month-long turnaround at its 90,000 tonne/year VAM plant in Jinshan that ended 6 May.

In Singapore, Dairen Chemical Corp was heard running its 350,000 tonne/year VAM plant on Jurong Island at the “lowest rate” since April, due to issues with feedstock supply, market sources said.

The VAM plant gets its feedstock ethylene supply from Shell’s Pulau Bukom cracker complex, which is on a prolonged shutdown.

Focus article by Helen Lee

Top image: Vinyl acetate monomer (VAM) is used in soles of sports shoes (Source: WestEnd61/REX/Shutterstock)