Prices of Vinyl Acetate Monomer (VAM) continued their bearish trend in the month of October, following the previous trajectories, with signs of stabilization by the end of the month, indicating the end of the destocking of excess supply in the inventories. In another striking development, prices of VAM began their bullish trend in the Asian markets, which seemed to stabilize at a price point closer to the American markets by the end of October 2023. VAM markets have been readjusting themselves to the oversupplied markets of the Americas with the demanding market of Asia Pacific.

In the North American markets, prices of VAM declined by 6.4% compared to the previous month of September 2023 on the back of destocking operations and weak global demand sentiment from the perspective of the construction sector and automobiles. Union workers' strikes resolved by the middle of October show marginal recovery in prices due to increasing demand from the automobile sector. Cost pressure persisted for VAM in North America as ethylene prices soared in the given timeframe. Interest rates continue to remain high, according to one market participant; VAM sales continue to drop as both the consumers and producers in the construction and real estate market postpone purchases, leading to stagnation in the market pulling up the rentals and cost of living. Labor markets tightened in October as strikes loomed across the major sectors of the economy, especially automobiles. Demand for VAM-derived goods from the packaging industry remained stable while price reductions were offered to lure customers due to the oversupply situation in the packaging industry as new capacities continued to spring up, especially in the PE and PP divisions. Celanese expects cost pressure on VAM and other Acetyls to increase, further deteriorating the chemical margins of VAM and subsequent downstream Polyvinyl Alcohols and Polyvinyl Acetate in the market. Demand forecasters expect weaker demand for the coming months due to seasonal challenges.

In Asia-Pacific markets, China's aggressive procurement strategy for the months of September and October seems to stabilize by the end of October, increasing the price point of VAM in Asian markets closer to VAM markets of North America. Prices showed upward mobility primarily due to China undertaking significant procurement activities for the downstream volume sales of packaging material; the agricultural sowing season for the Winter is about to begin. Chinese faced a loss of 1% GVA loss in Jan-May 2023 wheat harvests when demand was gradually recovering with Chinese demand improving; this year, China's demand for packaging material and related chemicals, including VAM, projected led to a revival in VAM prices as Chinese observed holidays in the first week of October. Chinese festive demand remained weaker than forecasted, leading to further oversupply in the market as Chinese in their domestic market continue to add capacities, especially Sinopec Chem. Primary reasons a Chinese market participant gives include increasing consumer sales and demand for automobiles driving the market in Asia Pacific.

While stabilization in prices is on the horizon, Europe continues to stay inflated. ChemAnalyst's forecasters expect rising prices of VAM due to cost pressures from the upstream and demand recovery in a gradual way from the downstream section. While seasonal challenges persist, sales volumes of VAM are expected to improve, offset by weak prices and high feedstock pressure. Overall demand is expected to decline, and oversupply is expected to stabilize.