HOUSTON (ICIS news)--US vinyl acetate monomer (VAM) supplies remain tight, even though Lyondell brought a plant back in service, and Celanese was increasing supplies to its contract customers, sources said on Friday.
I m just trying to dig myself out of this VAM hole, one buyer said.
All four US VAM producers - Celanese, Dow Chemical, DuPont and Lyondell - remained on force majeure, causing supply headaches for downstream industries.
DuPont's force majeure was beginning to be felt in the merchant VAM market, making the supply situation worse, sources said.
So far, buyers have said they have been able to source the material they need, but supplies are tight.
Everyone is living hand to mouth, said a distributor.
On 31 August, customers were told that Lyondell's 385,000 tonne/year LaPort plant in Texas was entering the restart process after sustaining flood damage. The plant would reach full rates by 3 September, customers were told.
Sources said they had not received any updates since, although they would have expected a notification if the plant was not restarted as planned.
Still, market sources could not be sure the plant was running at optimal rates, and Lyondell was not commenting on the plant s operations.
Lyondell has maintained a 50% allocation on VAM since flooding caused by the passage of Tropical Storm Erin damaged the plant. Upstream production of methanol and acetic acid also halted temporarily, but the damaged VAM unit took longer to repair and restart, market sources said.
Buyers said Celanese was able to supply its contract VAM customers at or near full volumes, after recovering from production losses related to the 2.5-month outage of its 1.2m tonne/year acetic acid plant in Clear Lake, Texas.
Sources said other producers VAM inventories at terminals were depleted by the recent tight market condition, and supply lines were lengthened in some cases by the need to ship directly from the plant to the customer.
VAM consumers estimate that the global market has an overcapacity of 20-30%, which could help restore the market s balance sooner than expected.
So far, producers have yet to declare their intentions for fourth-quarter VAM contract prices. Buyers expected price increase announcements to emerge next week.
Large-volume VAM customers with formula-based pricing were hoping for some price relief after natural gas values receded in the past month.
Third-quarter VAM contracts for small buyers (less than 5m lb/year) in the US were assessed at 58-61 cents/lb ($1,279-1,345/tonne) DEL (delivered), according to global chemical market intelligence service ICIS pricing.
Some small-volume customers without quarterly price protection have seen prices soar into the mid-to-high 60s cents/lb, sources said.
I m just trying to dig myself out of this VAM hole, one buyer said.
All four US VAM producers - Celanese, Dow Chemical, DuPont and Lyondell - remained on force majeure, causing supply headaches for downstream industries.
DuPont's force majeure was beginning to be felt in the merchant VAM market, making the supply situation worse, sources said.
So far, buyers have said they have been able to source the material they need, but supplies are tight.
Everyone is living hand to mouth, said a distributor.
On 31 August, customers were told that Lyondell's 385,000 tonne/year LaPort plant in Texas was entering the restart process after sustaining flood damage. The plant would reach full rates by 3 September, customers were told.
Sources said they had not received any updates since, although they would have expected a notification if the plant was not restarted as planned.
Still, market sources could not be sure the plant was running at optimal rates, and Lyondell was not commenting on the plant s operations.
Lyondell has maintained a 50% allocation on VAM since flooding caused by the passage of Tropical Storm Erin damaged the plant. Upstream production of methanol and acetic acid also halted temporarily, but the damaged VAM unit took longer to repair and restart, market sources said.
Buyers said Celanese was able to supply its contract VAM customers at or near full volumes, after recovering from production losses related to the 2.5-month outage of its 1.2m tonne/year acetic acid plant in Clear Lake, Texas.
Sources said other producers VAM inventories at terminals were depleted by the recent tight market condition, and supply lines were lengthened in some cases by the need to ship directly from the plant to the customer.
VAM consumers estimate that the global market has an overcapacity of 20-30%, which could help restore the market s balance sooner than expected.
So far, producers have yet to declare their intentions for fourth-quarter VAM contract prices. Buyers expected price increase announcements to emerge next week.
Large-volume VAM customers with formula-based pricing were hoping for some price relief after natural gas values receded in the past month.
Third-quarter VAM contracts for small buyers (less than 5m lb/year) in the US were assessed at 58-61 cents/lb ($1,279-1,345/tonne) DEL (delivered), according to global chemical market intelligence service ICIS pricing.
Some small-volume customers without quarterly price protection have seen prices soar into the mid-to-high 60s cents/lb, sources said.
