VAM Prices Face Global Volatility: Declines in Europe, Recovery Expected in China and US

Vinyl Acetate Monomer (VAM) prices in the European market have shown a constant decline from Q2 2023. This major development was due to declining demand from the downstream industry, especially the construction industry. As Huntsmen stated, In the European market, lower sales volume and reduced selling prices of their performance products like VAM in comparison to the performance of Q2 2022. This development was instigated mainly due to slowing down construction activity in Europe. Furthermore, demand from the coating, adhesive, and lube industry has declined, creating further negative sentiments in the VAM Market in Europe. Furthermore, Dow reported a global net decrease in sales year-on-year because of reduced building & construction activities. Thus, similar global market dynamics led to declining VAM market trends.

In the US market, there was a constant decline in VAM prices as of Q2 2023. Despite the fact that demand from the construction industry remained firm, creating supply pressure in the market, weak prices of feedstock Acetic Acid justified the overall downtrend in the product prices during this timeframe.

In the European market, the prices of VAM have shown a declining trend in the German market as of Q2 and the first month of Q3. These trends can be explained by declining demand from downstream industries like the construction industry. Additionally, According to Methanex, upstream Methanol prices have declined, leading to a decline in Feedstock Acetic acid prices.

In the Chinese market, there was a sharp decline in the prices of VAM across Q2. After that, in the first month of Q3, the prices have begun to recover. This market development can be explained by weak demand from the downstream industry due to the deflation problem in China in Q2. Furthermore, several pants, like Guangxi Guangwei Group in Yizhou in China, which has a capacity of 100,000 MT/year, and Celanese in Nanjing, Jiangsu in China, which has a capacity of 300,000 MT/year, which was on maintenance turnaround. This development led to a low inventory level in the VAM market, and inventory was offered at premium prices. Furthermore, the prices of VAM in the Asian market begin to rise in the first half of Q3. This was on the backdrop of low market material availability and improved demand from the international market due to the improved economic situation globally.

As per ChemAnalyst Database, "The prices of VAM in the US market in the upcoming months are likely to rise. This can be explained by the likely increase in the prices of Acetic Acid as supply would likely remain on the lower side due to Celanese's new Acetic Acid plant in Clear Lake, USA, stating delay in their plant start-up till 2024. Additionally, the prices of Acetic Acid are likely to rise in the US market. Furthermore, Natural Gas prices are likely to rise due to an improved economic situation creating further positive market sentiments. Furthermore, in the European market, prices of VAM are likely to show improvement on the backdrop of improved economic stability and rising demand from the construction industry.