LONDON (ICIS)--European vinyl acetate monomer (VAM) contract prices have dropped back again this month, market players have said on Friday.
The second month in succession that values have weakened, the outcome confirms that the sustained period of tightness has come to an end.
The average decline is estimated at €40-50/tonne, compared with minus €50-60/tonne in August. As in last month’s results, there have again been some quite wide disparities. Leaving aside some falls that are viewed as unrepresentative, numbers have typically slipped by between €25-60/tonne.
This variation in the size of reductions reflects a process of market adjustment over a two-month period. One supplier held the reduction to €20-25/tonne in September, having conceded a much larger decline of about €70/tonne in August.
The average decline means that contract prices are now assessed at €1,280-1,300/tonne FD, before any discounts, which are common and can be substantial in this market.
All sources, however, agreed upon the direction of prices, even if the magnitude varied substantially. And there was a consensus that, after a relatively prolonged period of tightness, product availability is no longer an issue. Contract prices have therefore generally followed the trend of spot values over the last two to three months, albeit that the price level continues to be higher than for spot numbers.
Opinion is rather divided over the prospects up to the end of the year. Sellers detect signs of some return of tightness, partly because of impending turnarounds across the Atlantic, while buyers tend to feel supply will now be plentiful. Any price changes from October onward will largely be determined by which of these perceptions turns out to be right.