Moderate upward trend seen on Europe VAM Q4 2013 contracts

10 January 2014 23:59 Source:ICIS News

LONDON (ICIS)--Fourth-quarter vinyl acetate monomer (VAM) contract prices were assessed by ICIS on Friday in the range of €825-860/tonne, up by €15/tonne at the low end from the third quarter.

The contracts were concluded on a free delivered (FD) northwest Europe (NWE) basis.

Market participants indicated that a moderate upward trend was representative of Q4 contract price outcomes, although stable prices were also seen.

Monthly contract pricing is the industry standard in Europe, with relatively few market participants now opting to price their contracts on a quarterly basis.

Monthly contract prices were assessed stable over the course of the fourth quarter, although growing upward momentum was seen towards the end of the period.

Sources said that spot prices have risen this month in response to higher ethylene and acetic acid costs.

In addition, EU tariffs on imports from some countries, including Saudi Arabia, increased from 2% to 5.5% at the beginning of the year.

This is reflected in bullish sentiment for January contracts, many of which remain under negotiation.

A producer said the additional imports that Europe will require following the closure of two plants in the fourth quarter of 2013 will have to be sourced from southeast Asia or China, with Singapore offering the best logistics.

While there should be sufficient capacity to keep Europe supplied, the additional costs of importing the material will have to be taken into account, the source emphasised.

Spot prices were assessed on Friday in the range of €830-850/tonne FD NWE, up by €10-20/tonne.

By Samuel Weatherlake