Dow has lifted force majeure on US VAM – customers

Lane Kelley

04-Sep-2014

Dow has lifted force majeure on US VAM - customersHOUSTON (ICIS)–Dow Chemical apparently has lifted its force majeure on US vinyl acetate monomer (VAM), customers said on Thursday.

The company did not respond immediately to a phone call. Customers said Dow lifted the declaration on 1 September, as some had predicted in late August, and is now operating at 100% sales control levels.

All of the major US VAM producers have been hit by a supply squeeze this year because of outages, mechanical failures and scheduled maintenance turnarounds. And conditions in the US have compounded a tightening in Europe stemming from two plant closures there late last year.

US VAM spot prices have soared from the tightening this year and essentially doubled for some customers. Shortly after Dow declared its force majeure, VAM spot prices rose to $1,700-1,900/tonne during the first week in July and have remained at that level.

Dow shut down its 365,000 tonnes/year VAM unit in Texas City in late June and declared force majeure after discovering a leak in a reactor, according to a state filing.

In a statement on 2 July, Dow explained that the “unexpected mechanical failure” had caused the plant to be shut down and had impacted the producer’s ability to meet supply obligations.

Dow’s move leaves two US VAM producers still under force majeure – Kuraray and LyondellBasell. Japan-based Kuraray took over DuPont’s VAM plant in La Porte, Texas in early June.

US VAM producers include Celanese, Dow, Kuraray and LyondellBasell.

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