Supply Disruptions in the US Pressurize the European Vinyl Acetate Monomer Market
- 21-Jun-2022 8:42 AM
- Journalist: Robert Hume
A Force Majeure (Unforeseeable circumstances which lead to a situation where the terms of a contract couldn’t be fulfilled) declaration by a US specialty chemical manufacturer (Celanese) based in Texas who majorly produces Acetyl chain products has impacted the markets of Ethylene Vinyl Acetate (EVA) in the US as well as several European markets. The company cannot reveal any specific details, timing, or impact this declaration has on its customers. The company has declared force majeure due to unanticipated disruptions in raw material delivery along the Texas Gulf Coast, and it is still assessing the regional and worldwide effects of these disruptions. Due to the painting and coating seasons, the strong demand for upstream Vinyl Acetate Monomer (VAM) from the end-users is applying extra pressure on an already dry market.
Europe, during the Second quarter, was able to import EVA and upstream VAM from Asia and ease the rising demand and supply tightness. Despite high demand in the European market, the Asian market is equally in need of VAM and EVA, so the manufacturing of the products in Asia is likely to stay in the Asian market rather than flowing into European markets. This circumstance raises the dependency of the European market on American imports, and the declaration by Celanese worsens the condition of the European market. The Rising demand for EVA in the downstream packaging industry for its higher flexibility and ability to handle extreme temperatures. The critical role of EVA in solar energy equipment (Solar cell encapsulation) drives the price of EVA in the European market, especially when countries like Germany are entirely trying to switch from fossil fuel to renewable energy sources to meet their energy needs.
According to ChemAnalyst, the price trend of EVA in the European market is likely to continue the rising trend. Due to high demand in the Asian markets, the imports from Asia have grown slowly and more minor. The supply disruptions in the American market also abets the rising price trend of EVA in Europe, likely to extend still the end of the third quarter of 2022.