For the Quarter Ending June 2023
North America
The prices of VAM in the US market have declined across Q2. This was due to declining acetic acid prices throughout Q2. Furthermore, the New rising interest rate in the US market created negative market sentiments in the US. In Addition, there was weak demand from the downstream Polyvinyl Alcohol industry, which subdued VAM market growth in the US. Furthermore, plants were operating at lower rates due to weak demand from the downstream industry, like adhesive. Additionally, there was an adequate inventory level in the market to meet downstream demand. Demand from the international market has been weak across Q2 creating overall negative VAM market sentiments. Furthermore, the plants were operating at normal rates amid weak downstream demand. PMI for the US market has been 49 and 49.60 for the last two months of Q2, indicating a drop in the manufacturing sector for a major part of q2. Thus, as of June, the prices of VAM in the US market were stated at USD 1698/MT FOB Texas.
Asia-Pacific
The prices of VAM in the Chinese market have significantly declined due to weak demand from the downstream paints & coating industry. Moreover, there has been a deflation problem in China as the inflation rate was stated at 0.1 in April, 0.2 in May, and nil in June. The prices of coal in China have declined this was due to imported Australian coal being offered at discounted prices which led to the decrement in input production costs. Furthermore, demand from the international market has declined significantly due to a weak global economic outlook and economic uncertainty, which created an overall pessimistic VAM market view in China. Additionally, the plants were operating at a slower rate due to weak demand from downstream industries like PVOH and EVA. Furthermore, there was an adequate inventory level in the market to meet demand from the downstream industry, and the buyer was hesitant to procure new orders due to constant declining prices. Thus, as of June, the prices were stated at USD 716/MT FOB Dalian.
MEA
The VAM market in Shown a bearish market trend in Q2 as prices declined as there has been a decrement of 42.8% in the prices of VAM as of Q2. This can be explained by declining demand from downstream industries like PVOH and EVA. Moreover, the prices of feedstock acetic acid declined throughout Q2, justifying the drop in the VAM prices. Furthermore, there was a high level of inventory in the market, which led to the seller offering discounts to increase market transactions. Additionally, the crude oil prices decrement, which led to a decrement in input production cost. Furthermore, demand from the international market has declined amid a weak global economic outlook. In Addition, due to continuous significant declining prices, there was hesitance among market players for procurement of huge orders. Similarly, procurement of new orders was needed on a demand basis as there was wait-and-watch sentiment in the market. Thus, as of June end of Q2, the prices of VAM were stated at USD 806/MT.
Europe
VAMsssss prices in Q2 in the German market have shown a bearish trend. This can be attributed to a decline in demand from the downstream paints and coating industry, as well as decreased demand from PVOH and EVA throughout Q2. Additionally, the prices of feedstock acetic acid have also declined, further impacting the prices of VAM in the German market. Furthermore, the rising interest rates and continued high inflation, with rates of 7.16% in April, 6.1% in May, and 6.3% in June, have curbed the purchasing power of consumers in end-use industries. The market has also experienced a flow of cheap imports from the Asian market, resulting in an overflow of inventories and contributing to negative market sentiments, particularly due to declining downstream demand from the construction industry. Moreover, there has been a decrease in market transactions, with buyers offering discounts to increase activity. As of the end of June, the prices of VAM were reported at USD 1361/MT FD Hamburg.
For the Quarter Ending March 2023
North America
In the North American region, the VAM market experienced a bearish sentiment during the first quarter of 2023, with prices declining due to lower demand from domestic and international markets as well as higher supply levels. The restart of several plants from turnarounds and fewer shutdowns led to an increase in VAM inventories. Additionally, there was a decrease in demand from Polyvinyl Alcohol, Polyvinyl Acetate, and other value chains due to reduced purchasing activities from end-user industries such as adhesives, paints, and coatings. After Federal Reserve increased its interest rates to curb the rising inflation in the country, the price increment in the commodities was not observed in the US. Consequently, the price of VAM dropped to USD 1870/MT FOB New York and USD 1820/MT FOB Texas as of March 31.
Asia- Pacific
During the first quarter of 2023, VAM prices in the Asia-Pacific region demonstrated an overall upward trend. In China, the VAM market had a positive start to the quarter, as market activity picked up following the government's decision to abandon its zero-COVID policy. This resulted in increased demand for the product, primarily due to a rise in procurement from downstream industries such as Polyvinyl Acetate and Polyvinyl Alcohol. Additionally, after the Lunar New Year holiday, market participants restocked the available material. Also, Acetic acid and Ethylene prices continue to rally in the Chinese market, increasing cost support for VAM. In March, there was a slight decrease in prices following a sustained rise because purchasing activities from Asian and European countries toned down amid weakened demand from the paint and coatings industries which resulted in fewer offtakes from the VAM market, leaving market participants to clear their stocks at lower prices. Therefore, the VAM prices for FOB Dalian settled at USD 1200/MT on March 31.
Europe
VAM prices showed fluctuation in the European region during the first quarter of 2023. In the first two months of Q2, the German market saw an overall increase in VAM prices due to higher production costs, lower inventory levels, and increased procurement. Market participants reported improved consumption from downstream paints and coatings and other industries improved, thus increasing the demand pressure on the VAM. Meanwhile, supply chain dynamics remained stable, resulting in normalcy in trading. However, the VAM market showed bearish sentiments in the final month of Q2, and prices decreased due to a drop in feedstock Acetic Acid prices. Additionally, operating rates were reduced in the domestic market owing to fewer offtakes from downstream industries. Moreover, cheaper imports from the Asian market also put downward pressure on VAM prices. Therefore, the price of VAM reached USD 1520/MT FD Hamburg on March 31.
Vinyl Acetate Monomer Prices fell mainly as feedstock Acetic acid prices continued their decline throughout Q4 of 2022, and energy prices stabilized in the US market while imported Vinyl Acetate Monomer prices have also remained comparatively lower than the domestic prices. Production rates remained weak in the wake of stable consumption rates in the domestic market. The cost of production remained stable as Natural gas prices fell while feedstock Acetic acid prices dropped persistently. Meanwhile, imports from Asia pacific region have strengthened amid a decline in freight charges. Demand from downstream Paints & coatings and Adhesives and polymers industry declined as the construction industry witnessed a drop in demand during the ongoing winter. Meanwhile, consumer sentiment continued to remain sluggish in the US market, while demand from the international market also remained stable as Europe continued to face soft consumer sentiment. Meanwhile, the US Federal Reserve continued to tighten the monetary policy to curb inflation.
Vinyl Acetate Monomer prices continued their decline during the last quarter of 2022 as the demand dynamics from downstream industries remained sluggish. Buying sentiment in the market has been termed as rigid due to snuck consumption rates and limited queries, as reported by several market participants. Additionally, feedstock Acetic acid prices have remained sluggish, resulting in weak cost pressure on downstream Vinyl Acetate Monomer. Meanwhile, covid lockdowns and the underwhelming performance of the construction industry contributed to soft consumer sentiment and weakened consumption rates.
During the 4th quarter of 2022, the market sentiment in the European Vinyl Acetate Monomer remained sluggish as the market participants reported limited queries from downstream users, as the West faced sluggish consumption rates owing to soft consumer sentiment. Meanwhile, the threat of a recession continues to ease, as reported by several firms. Meanwhile, feedstock Acetic acid prices have dropped in the European continent easing the cost pressure, while imports from the Asia pacific have remained ample, increasing the material available in the European market in the last quarter. Port congestion and labor strikes highlighted the first half of the quarter, which eased during the second half of the quarter.
