US Nov VAM contracts fall on lower feedstock

Lane Kelley

27-Nov-2018

HOUSTON (ICIS)–US vinyl acetate monomer (VAM) November contracts dropped 2 cents/lb ($44/tonne) on lower feedstock prices, which fell alongside crude oil.

US VAM contracts as assessed by ICIS dropped to 63-64 cents/lb from 65-66 cents/lb previously.

The dip followed a big drop in spot methanol prices in the past week. Methanol is used to make acetic acid, one of the two main feedstocks for VAM.

US methanol spot barge prices have dropped significantly in the past week, falling to 109.5 cents/gal for December delivery late last week, then to 104 cents/gal this week, on lower prices in Asia and Europe and the continued drop in crude.

US acetic acid export prices have also declined this week on the drop in methanol.

Benchmark West Texas Intermediate (WTI) closed the week at $50.17/bbl, down from $56.46 at the previous Friday close. Oil prices on Tuesday closed at $51.56, a drop of about 33% since the yearly high was set in early October.

The drop in US VAM Nov contracts is the third monthly contract drop in 2018.

Contracts peaked for the year in June following Dow Chemical’s declaring force majeure in May because it had trouble sourcing acetic acid from supplier BP. Dow lifted the force majeure for North America in late July and for the rest of the world in August.

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

Image above shows wood glue, which is made of polyvinyl acetate, a polymer of VAM. Source: Shutterstock.

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