HOUSTON (ICIS)--Spot prices for US vinyl acetate monomer (VAM) moved up $25/tonne (€19/tonne) this week on higher feedstock costs and supply developments in the US and Europe, sources said on Tuesday.
The hike pushed the spot range for VAM up to $955-1,055/tonne from $930-1,030/tonne previously.
Some of the move came from feedstock US ethylene edging up to 54.00 cents/lb ($1,190/tonne) from 52.75-54.50 cents/lb a week earlier, on expectations that pipeline issues that have depressed prices will be resolved in the next two months.
But the big reasons continue to be VAM supply developments in the US and Europe, particularly DuPont’s recent deal to sell its Texas VAM plant as part of an acquisition by Japan-based Kuraray. Latin American buyers worry that the deal will reduce the supply of VAM in the market and drive prices up.
Another concern is tightening of the VAM supply in Europe, because of an INEOS plant closing in October and a Celanese plant in Spain scheduled to close soon. Those closings will require more imports from the US, which also exports to Latin America.
A small factor in the increase could be seasonal. VAM demand in Latin America often rises at the end of the year because many families paint their houses for the Christmas season. VAM is an ingredient in architectural paint.
Celanese issued another round of increases for VAM and feedstock acetic acid this week, proposing a 2.5 cent/lb hike for those chemicals and others on 1 January in North and South America, Europe and Asia outside of China.
A Latin American buyer said the latest hike would be too much for the market to accept in a low-volume period at the beginning of the year.
Celanese also sought a similar increase on acetic acid in early November, citing rising methanol costs. Buyers expected some of the increases to go through. Methanol contract prices have risen 16% in the past month.
($1 = €0.74)