Vinyl Acetate Monomer prices held steady amidst the limited demand outlook and the tight supplies of the commodity in the domestic market.  Major petrochemical units went offline amidst such havoc. It was also reported that INEOS cracker was damaged due to the category 1 hurricane. In this context, the prices of Vinyl Acetate Monomer remained steady in US, assessed by ChemAnalyst around FOB Texas USD 1260/MT in the week ending on 12th July 2024.

Vinyl Acetate Monomer (VAM) prices were assessed around USD 1250/MT in the last week of June. This situation was also reflected in the upstream methanol price revision. Hurricane Beryl’s impact on VAM prices in the subsequent week has been minimal due to strong inventories built up in US.

From demand side, US domestic VAM demand weakened after US Census Bureau released housing permits data for May. According to data, building permits fell 3.8% MoM over April and 9.5% YoY. This situation in US is expected to ease demand for VAM derived paints and coatings in the coming months. From supply perspective, both Acetic acid and Ethylene continue to provide significant cost pressures for VAM producers downstream. Ethylene prices were revised 7% MoM in June in the spot markets.

VAM prices in Europe on the other hand have begun their descension as PMI data for construction across EU remained sub. EU markets have been overstocked in VAM supply due to higher US imports flowing into their supply mix, with increase in domestic production in Europe. This descension was mainly attributed to easing of cost pressure from natural gas and weak demand observed for exports to UK, as UK traders held their positions for election results for the last two weeks of June. As prices of VAM in Europe have been declining due to lower demand, US exports to EU are anticipated to ease, thus further easing price pressure in US domestic supply in the coming months.

Recent Bureau of Labor statistics data for June revealed that construction sector added 27,000 jobs in June, higher than 12 months average indicating that greenshoots in the revival of construction industry in H2 is expected. However, US Federal reserve has kept their interest rates unchanged despite ECB cutting the rate by 25 basis points. These two developments coupled with high freights charges due to uncertain geopolitical situations in the Middle East, have kept the market largely bearish and holding on to their current prices for VAM.