Asia EVA bolstered by curtailed China output, flat-to-firm feedstocks

Author: Helen Lee

2020/07/22

SINGAPORE (ICIS)--Asia’s ethylene vinyl acetate (EVA) market will likely remain supported by tightened supply in China due to curtailed output coupled with steady demand for material with 22-33% vinyl acetate (VA) content.

Spot prices of 14-20% VA-content EVA was leading the uptrend, fueled by production issues in China.

During the week ended 21 July, spot prices of 14-20% VA-content EVA rose $30-60/tonne week on week to $1,020-1,155/tonne CFR (cost & freight) CMP (China Main Port) and to $1,100-1,155/tonne CFR SE (southeast) Asia, ICIS data showed.

Spot prices for EVA with 22-30% VA content rose by $20/tonne during the same week at $1,190-1,250/tonne CFR SE Asia; while those for material with 28-33% VA content were stable at $1,150-1,180/tonne CFR NE Asia, the data showed.

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In China, Yanshan Petrochemical’s plant is undergoing maintenance until end-July, while BASF-YPC’s plant is having production issues following completion of a turnaround.

Separately, Jiangsu Sailboat Petrochemical has shuttered its EVA plant this week following an outage on 17 July at its upstream methanol-to-olefins (MTO) plant.

In the Chinese domestic market, prices of EVA with 18% VA content extended gains in the week ended 21 July to yuan (CNY) 9,400-9,800/tonne delivered (DEL), up by CNY400/tonne from the previous week, according to ICIS data.

Tight EVA supply overshadowed the market impact of seasonally weak demand from downstream footwear sector.

The supply constraints and steady-to-firm feedstock costs could prevail for the rest of the third quarter.

“Although demand is still weak, the market should remain firm until September as buyers are keen to stock up on perception of low prices,” said a downstream converter in the footwear materials sector.

Other end-users of 22-30% VA-content EVA in the hotmelt adhesive sector noted that inventory levels in the market is low with traders having sold out their July stocks.

The majority of EVA producers in Asia are slated to finalise fresh offers for August shipments in the coming days.

On the demand side, plant utilization rates in the downstream hotmelt adhesives sector in China are projected to remain at 90% in July, with August rates expected at 80-90%.

Downstream converters in the photovoltaic (PV) sector expect the EVA market to remain supported in the second half of 2020 by increased power generation capacity and the Chinese government’s subsidy for the PV industry.

China has plans to subsidize 434 PV power projects with total installed capacities of almost 26 gigawatts in 2020 across 15 regions.

One of the major solar cell encapsulant film producers in China intends to continue running its plant at around 80% of capacity for the rest of the year, depending on the labour supply situation. This would prop up demand for the 28-33% VA-content EVA.

On the feedstocks front, ethylene import prices in northeast Asia during the week ended 17 July stabilised after the previous week’s decline, as limited fresh spot supply from regional suppliers and a firmer US market counterbalanced weak restocking activity.

During the same week, Asia’s vinyl acetate monomer (VAM) spot market continued to be supported by a combination of curtailed export availabilities from China as well as firmer upstream acetic acid and methanol values.

Separately, VAM supply in northeast Asia will be curtailed in the near term on a spate of ongoing and impending plant outages in South Korea and Taiwan.

Focus: Asia EVA bolstered by curtailed China output, flat-to-firm feedstocks

Focus article by Helen Lee

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