Hamburg (Germany): In recent weeks, Vinyl Acetate Monomer (VAM) prices have eased in Europe, with a modest increase of around USD 15/MT or 2% MoM. This contrasts with the previous three months, where prices rose approximately 12% from January to March 2024, due to tight market conditions in the US. Similarly, US VAM prices eased in May 2024, following the trend in EU markets. While the Western Hemisphere has seen price reductions in VAM, the Eastern Hemisphere continues to experience deflationary pressures due to oversupply, particularly from China and the Middle East. However, price easing observed in early June in Northern Europe and the Western Hemisphere was offset by Celanese declaring force majeure in Texas to stabilize prices.

In European markets, price movements in May indicated a decrease in the rate of increase from 8% MoM to 2% MoM as the second quarter began in April. Delayed deliveries of VAM from April and March's end reached European and American Gulf coasts, causing increased fluctuations, safety stocking, and higher surcharges by shipping companies, prompting importers to expand their domestic inventories for overseas shipments.

Two factors contributed to the price easing of VAM in Europe. Firstly, from a supply perspective, the availability of containers and tankers on the trans-Atlantic route in early May facilitated faster deliveries to Europe ahead of the peak summer demand, especially for EVA-based products and construction end-uses. Freight charges on the trans-Atlantic route initially exceeded USD 2700/FEU but declined to USD 2093/FEU by the end of May 2024, as trade eased partly due to European stocking pauses during EU parliamentary elections and partly due to increased supply in the EU. Additionally, Middle Eastern VAM deliveries to major EU ports such as Rotterdam within the same timeframe contributed to temporary oversupply. The synchronized scheduling of deliveries from the Middle East and the US for the European markets this month contributed to stability in intra-EU distribution.

Another contributing factor to the price easing of VAM has been increased outbound shipping from China for June and July deliveries to the EU. Anticipating future tariffs from the US and EU, Chinese suppliers have pre-booked major containers primarily for polymers and partially for feedstock and petrochemicals. In the latter half of May, prices for Shanghai's cheaper VAM surged to USD 7300/FEU for deliveries to Genoa, Rotterdam, and New York, prompting VAM importers to schedule deliveries once freight prices stabilize. Conversely, INEOS and LyondellBasell's increased domestic capacities in Europe have met the demand targets for VAM in late May and June, adding higher-priced European supply to the inventory mix and preventing prices from falling despite high imports from the Middle East reaching the EU. According to ChemAnalyst's projections, VAM prices are expected to continue easing in June and July, with cumulative decreases of more than 3% over the next two months due to high supply.