Asia VAM buyers resist Celanese’s $100/tonne price hike

SINGAPORE (ICIS)–Buyers of vinyl acetate monomer (VAM) in Asia were resisting the $100/tonne price hike issued by major producer Celanese, as some of them have sufficient cargoes to cover their requirements for the next two months.

In Thailand, southeast Asia, some buyers were opting to wait until after the Songkran festival, the country’s new year celebration in mid-April, before entering into discussions for May shipments.

Celanese announced on 10 April its VAM price increase for Asia ex-China with immediate effect, citing reduced output and high cost of feedstocks acetic acid and ethylene.

Other producers that supply to Asia have yet to announce their offers.

An end-user was initially expecting lower prices from Celanese, whose upstream acetic acid plant in Singapore is expected to restart soon, which would mean increased production at its 210,000 tonne/year VAM plant at the site.

During the week ended 6 April, VAM spot prices in southeast Asia and northeast Asia were stable at $1,190-1,210/tonne CFR (cost and freight) SE (southeast) Asia and $1,270-1,280/tonne CFR NE (northeast) Asia, according to ICIS data.

Deals for April shipments last week were concluded from around the mid-$1,100s/tonne to the low-$1,200/tonne cost and freight (CFR) SE Asia and CFR south Asia levels.

Taiwan’s Dairen Chemical Corp on 12 April halted offers from its Singapore-based VAM plant amid output cuts caused by shortage of feedstock ethylene.

In India, demand for May-delivery cargoes was patchy as traders with depleted inventories and without regular sources of supply was willing to pay up to the mid-$1,200s/tonne CFR India for China-origin cargoes, on an import duty paid basis.

End-users and other traders, however, deemed such prices not workable for the majority of buyers in India as consumption for May volumes may be curtailed on expectations of a slowdown in downstream demand ahead of the monsoon season, which will start in end-June.

On 6 April, prices in the key south Asia market of India were assessed at $1,170-1,210/tonne CFR south Asia, up $20/tonne at the low end of the previous week’s price range, the data showed.

Firm offers from China were elusive as suppliers opted to monitor market direction before finalizing offers.

“It is not easy to increase prices as downstream performance is weak and not many deals [will be] done at such prices,” a southeast Asia-based buyer said.

Focus article by Helen Lee

Picture: Singapore port. (Source: RESO/REX/Shutterstock)