For the Quarter Ending June 2021
Aftermaths of the US freeze fallout severely hampered the North American Vinyl Acetate Monomer (VAM) market in Q2 as the market supplies were sluggish due to a series of plant closures. Some of the plants restrained from operating at full efficiencies amidst restricted availability of the feedstock Acetic Acid. US exports of VAM to the European region were almost negligible till May. Demand surged from the construction sector with improved offtakes of the acetyl derivatives from the paints and coating industries. Enquiries were also improved from the packaging and adhesives industries. Prices remained upbeat throughout the quarter with FOB Texas offers settling at USD 2390 per tonne in June, observing an increment of nearly 30% from the assessments in March 2021.
During the first half of the second quarter, the supplies of VAM in the Asia Pacific region were severely impacted with some plant turnarounds reported in Taiwan, Japan, and South Korea. Some suppliers were heard diverting shipments to the European region in anticipation of better netbacks. Prices in China eased in the latter half of the quarter after surging to historic highs in April. FOB Shanghai price was assessed at USD 1929 per tonne in June. Demand was high throughout the quarter in China due to new EVA capacities by Sinochem Quanzhou and Sinopec Yangzi Petrochemical.
VAM supplies in the European region were improved compared to the previous quarter owing ease in shipments from the USA as the industrial infrastructure in the US Gulf Coast (USGC) region restarted. Whereas the Asian cargoes were delayed due to the Suez Canal blockage in April starting. Market sentiments were bolstered as traders replenished the inventories which caused the slowdown in recovery pace of VAM supplies to the European market. Demand observed a seasonal hype from the construction sectors with better offtakes from the adhesives industries.
For the Quarter Ending March 2021
The VAM market in the region was tight during the Q1 of 2021, as the several plant outages were heard for nearly two weeks due to sub-freezing temperatures in Texas. Due to the domestic market volatility and surged prices of VAM across the US, the key VAM exporter, buyers shifted towards the Asian suppliers to balance out market dynamics. In the meanwhile, improved consumption from the downstream building & construction and paints & coatings surged the demand of VAM in the region. US VAM exports showed marked reduction during the quarter with the prices settling at USD 1350 per MT FOB Texas in the final week of March.
VAM supplies were tight in the first half of the Q1 2021, as the several plants in China remained under maintenance shutdown. However, the situation improved towards the quarter end as the various plants resumed operations. The global supply shortage due to several plant turnarounds in US provided better netbacks to the Asian VAM suppliers, who implemented a positive revision in their offer prices amidst the supply shortage. The demand during the period improved as the utilization from the downstream sector increased with economic rebound in China. The Indian market faced inflationary pressure in VAM that affected the gross margins of most consumer companies in the near term. With the market translating strong influence of global supply shortage, VAM the prices in India were averaged around USD 1215/tonne during the quarter.
VAM supplies remained tight throughout the quarter, as maintenance shutdowns were scheduled at various facilities across the region. Market was unstable throughout the quarter amid the second COVID wave, however the mass vaccination program kept market optimism high in the European region. The deficit in imports from the US was balanced by the Asian VAM, as capacity utilization improved from the downstream adhesives sector.
For the Quarter Ending September 2020
Spate of plant turnarounds from Taiwan and South Korea throughout the third quarter of 2020 tightened the overall availability of VAM cargoes in Southeast Asia. Thus, prices of VAM in Q3 of 2020 Southeast Asia averaged around USD 807 per MT influenced by its healthy demand fundamentals and scarce product availability. Despite the restricted availability, paramount producers like Celanese and Dairen Chemicals continued to operate their plants at reduced rates amid fears of uncertainty prevailing from the second wave of Coronavirus in several parts of the region. Downstream demand for derivatives like Ethyl Vinyl Acetate (EVA) and Poly Vinyl Acetate (PVA) witnessed marginal recovery in Northeast Asia as countries restarted their business activities to save the sputtering economy.
Market fundamentals of Vinyl Acetate Monomer (VAM) in North America remained weighed up buoyed by strong values of feedstock acetic acid and series of plant outages in the Gulf coast region due to a wave of seasonal hurricanes. Since much of the US VAM is used for catering the global demand, abrupt outages and logistic concerns restricted the trading activities, thereby confining the export revenue of the region. As per Celanese Corporation, 10% quarterly increment in demand from its major importer China was registered but the gains were overshadowed by the consistent availability of material due to high production rates in the native country.
The European Vinyl Acetate Monomer (VAM) market witnessed severe supply issues primarily due to the turnaround of Celanese plant in Germany followed by few other temporary turnarounds in the region. Strong consumption from paints and coating sector on the arrival of summer season in the country bolstered its demand fundamentals. Although supply issues were resolved by the end of the quarter, momentum of recovery was hindered by the buzz of resurgence of Coronavirus in several parts of the region.