How does increasing utility cost lift the VAM prices? Let's find out
- 11-May-2022 7:14 PM
- Journalist: Jung Hoon
Tokyo, Japan - Accelerating utility costs and growing raw material ethylene and Acetic Acid market flooded the price of Vinyl Acetate monomer (VAM) in the Asian market. Significant producers of VAM in Japan, namely Kuraray Corporation Limited, revised the costs because of increasing operating costs and affecting production rates due to supply shortages.
However, against the backdrop of vigorous interest from domestic and overseas suppliers, the costs of Vinyl Acetate monomer (VAM) continued to soar, driving the operating margin rapidly downwards. Logistics constraints and flooding transportation costs impacted the costs for the Asian market. Downstream adhesive and photovoltaic sectors were likewise compressed with restricted sources and bullish requests from the customers' end.
Sources confirmed that the demand for acrylic glue has been growing over the past couple of months, which lifts the market sentiments toward the product. When observed on 6th May, the cost of Vinyl Acetate monomer (VAM) in Japan flooded to USD 2195/ton FOB Tokyo with a week-on-week tendency of 0.22%.
Another major exporting country, USA inventories also remained affected by low supplies. The rising conflict between Russia and Ukraine is accelerating the cost of crude oil and Natural Gas, influencing the Petrochemical market of the USA. Downstream adhesive and photovoltaic sectors are developing with consistent flooding requests, expanding utilization from significant adhesive manufacturers.
Narrowing profit and supply constraints forced the producers to increase the prices of Vinyl Acetate Monomer (VAM) for homegrown and overseas providers. Feedstock acetic acid and Ethylene market remain bullish with high utility expense and devastating accessibility. On 6th May, the price of VAM in the USA surged to USD 2893/ton FOB New York.
"Negotiations among the traders for Vinyl Acetate monomer (VAM) are challenging as spot prices are increasing amid strong demand and low inventories, which will also impact the future sentiments," stated a trusted source in Tokyo.
As per ChemAnalyst, it is assessed that the cost of Vinyl acetate monomer (VAM) may increase in the global market with a widening supply/request gap. Significant producers of various Petrochemical units will tend to increase the price of their producers, and the final burden will come on the consumers. Exports of VAM from Japan to India and other Asian nations will decrease gradually because of low production rates amid high demand from the worldwide market.