SINGAPORE (ICIS)--Asia’s vinyl acetate monomer (VAM) market is expected to find support from supply shortages due to curtailed output in China as well as plant overhauls in the early part of this year, whereas the longer term consumption growth is expected to stem from northeast Asia and India.
The shortage of feedstock natural gas amid the winter heating season in China caused the prolonged outage at Sinopec Sichuan Vinylon’s VAM plant since 21 December 2017. The plant was unlikely to resume operations in January 2018.
A couple of ethylene-based VAM plants are also slated to shut for maintenance from 8 January onwards.
The supply availability of spot cargoes from Japan was expected to be limited until the second quarter of 2018 due to a plant shutdown.
Separately, another VAM plant in China may be taken off line in February due to feedstock cost pressure, according to source close to the company.
Downstream ethylene vinyl acetate (EVA) producers, namely those in South Korea, plan to focus their output on EVA grades with higher vinyl acetate (VA) content of 28-33% in 2018, rather than grades containing less VA, amid buoyant demand for the higher VA content grade from the downstream photovoltaic industry.
This was expected to contribute to additional VAM demand of at least 20,000 tonnes in 2018 in South Korea, according to industry sources.
The longer term outlook was likewise optimistic on the part of producers owing to capacity expansion plans in several other downstream sectors, namely as downstream polyvinyl alcohol (PVOH) production capacities in Japan and Taiwan were slated for expansions in 2019, which would curtail the VAM volumes available from the integrated producers for the merchant market.
Capacity expansion plans in the downstream vinyl acetate ethylene (VAE) copolymer sector in south Korea in 2019 further bolstered the sentiment of suppliers on the northeast Asia VAM market, especially since the market could not benefit from the supply of non ethylene-based VAM from China due to product application concerns, unlike the case in southeast Asia and India.
In India, VAM consumption was also set for a marginal increase in 2018 as a downstream emulsions and adhesives producer plans to increase its plant capacity by the first quarter.
Set against a background of a lack of new VAM capacities and a tight supply-driven price rally in the most part of 2017, market players were largely optimistic on the market outlook in 2018 despite a lighter schedule of plant turnarounds compared to 2017.
Asia VAM plant turnaround 2018-2019
|Company||Capacity (tonnes/year)||Location||Turnaround period|
|Dairen Chemical Corp.||300,000||Mailiao||8 Jan 2018: 1 month|
|Dairen Chemical Corp.||120,000||Dasheh||Early March 2018: 1 month|
|Dairen Chemical Corp.||350,000||Mailiao||Aug/Sept 2018: 1 month|
|Dairen Chemical Corp.||350,000||Singapore||2018|
|Sipchem IVC||330,000||Jubail Industrial City, Saudi Arabia||Q2 2018: 15 days – 1 month|
|Celanese||300,000||Nanjing, Jiangsu||Summer 2018|
|Showa Denko||175,000||Oita, Japan||7 March-12 April 2018|
|JVP||150,000||Sakai, Osaka||June-July 2018: 20-26 days|
|Sinopec Sichuan Vinylon Works||300,000 + 200,000||Chongqing, Sichuan province, China||Sept-Oct 2018: TBC|
|Nippon Gohsei||180,000||Mizushima, Okayama||2019: early Mar-late Apr around 45 days|
|Lotte BP Chemical||210,000||Ulsan, S. Korea||Apr/May 2019: 1 month|
|Sinopec Great Wall Energy||450,000||Ningxia, China||No major shutdown plans|
|VAM plant turnaround schedule 2017|
|Company||Capacity (tonnes/year)||Location||Turnaround Plans|
|Dairen Chemical Corp||120,000 No 1||Dasheh, Taiwan||Early Feb: 4 weeks|
|Nippon Gohsei||180,000||Mizushima, Okayama, Japan||3 Mar-late Apr|
|Sinopec Beijing Eastern Petrochemical||90,000||Beijing, China||10-31 Mar|
|Sinopec Shanghai Petrochemicals||90,000||Jinshan, China||28 Mar - restart date TBC|
|Dairen Chemical Corp||300,000 No 2||Mailiao, Taiwan||Early Apr-29 Apr|
|Dairen Chemical Corp||350,000||Jurong Island, Singapore||17 July: 1 month|
|Celanese||300,000||Nanjing, Jiangsu, China||Mid Mar-H1 Apr|
|Celanese||300,000||Nanjing, Jiangsu, China||Oct: 4 weeks|
|Celanese||210,000||Jurong Island, Singapore||Nov: 2-3 weeks|
|Lotte BP Chemical||210,000||Ulsan, South Korea||19 May – 11 June|
|Shanxi Sanwei Group||70,000||Linfen, Shanxi, China||5 May: 20 days|
|SIPCHEM/IVC||330,000||Jubail Industrial City, Saudi Arabia||30 May – 1 July|
|Showa Denko||175,000||Oita, Japan||24 July – 8 Aug|
|Anhui Wanwei||170,000||Anhui, China||10 July – end July|
Outlook article by Helen Lee