Is Any Recovery in Sight for Chinese VAM Prices in the Short Term?
- 24-Aug-2022 9:56 AM
- Journalist: Patrick Knight
Shanghai, China: For so long, the price value of Vinyl Acetate Monomer has been declining in the Chinese market. An increment in the value has become a long-lost thing for the VAM market. Would the ongoing economic crisis or the China-Taiwan tensions impact the Vinyl Acetate Monomer market, or could we expect redemption in the Vinyl Acetate Monomer market in the short term? These are the two major questions right now. During the last week, The Vinyl Acetate Monomer (VAM) prices assembled at USD 1640/MT FOB Dalian after showcasing a significant plunge of 6.82%. Because of the oversupply of VAM and its feedstock on the domestic market, prices have been declining recently.
The Chinese market has been experiencing more than sufficient supply of feedstock Acetic Acid which eventually is causing an excessive level of inventories of Vinyl Acetate Monomer. Furthermore, Vinyl Acetate Monomer (VAM) is being produced at a cheap start-up and running cost, which has caused a steady drop in its price. Acetic acid, a raw ingredient, and upstream methanol have showcased significant price decreases, eventually leading to the price reduction of VAM. Another important reason for the ongoing decline in the price of Vinyl Acetate Monomer is inadequate transportation from many businesses. The weak downstream demand for VAM from paints, coatings, adhesives, and sealants contributes to the product's falling value.
These elements have been working together to influence the market and drive down the cost of Vinyl Acetate monomer. As a result, the market's driving forces have been dwindling, and the negative trend has weakened, leading to the VAM market's current situation. As of now, neither the economic crisis nor the budding China-Taiwan tensions seem to be affecting the Vinyl Acetate Monomer (VAM) market. Things can get complicated later, but for now, the VAM Prices have been dropping consistently.
As per ChemAnalyst anticipations, "The Vinyl Acetate Monomer (VAM) market would keep plummeting in the short-term owing to overflowing inventories, poor demand, and decrementing feedstock price value. Any recovery in the VAM market is not expected. However, things can get different turns if China-Taiwan tensions worsen in the future."