Vinyl Acetate Monomer Weekly Report 26 May 2018

Weekly Price Trend: 21-05-2018 to 25-05-2018

• The graph above focuses on the Vinyl Acetate Monomer price trend for the current week.
• Prices has increased to significant level in domestic market on back of limited supply coupled with rise in the prices of Acetic Acid.
• By end of the week prices were assessed around Rs.108/Kg for Kandla port and Rs.109/Kg for Mumbai port.

Booking Scenario

The above chart shows the international prices for Vinyl Acetate Monomer. International prices of VAM increased heavily again for this week. VAM with zero duty was available at USD 1350/MT in for traders.

INDIA & INTERNATIONAL

• VAM prices were assessed at the level of Rs.108-109/Kg at Kandla and Mumbai port bulk quantity. Hike has been significant in past few weeks.
• Limited supply of the chemical from international market along with surging prices of feedstock Acetic Acid in international as well as domestic market has put an additional pressure on VAM values in domestic market.
• The constant delay in the shipments from Singapore and Taiwan since April has led to shortage of the chemical. The manufacturers are unable to fulfill their commitments as there is constant shortage of feedstock Acetic Acid. Now the major suppliers are first catering to their domestic market in Asian subcontinent. So many believe to import it from American market.
• To add to their woes, one of the major manufacturers of VAM, DOW chemical declared force majeure on its unit. The reason behind this has been the external factors related to supply of material and production issues. The force majeure is likely to last for around two months. The market experts believe that this force majeure is due to BP’s force majeure at a US acetic acid plant in Texas in late April. This has led to acute supply and huge demand in American market.
• Supply will improve in Asia as one of the major units of VAM will be started by Great Wall Energy in China. This unit has the manufacturing capacity of 4,50,000 tonnes/year. But again the market is facing acute shortage of Acetic Acid.
• The force majeure in major companies has pushed on the domestic prices in the upcoming months with a tight acetic acid market providing further support.
• VAM prices in Asia-Pacific will reach at their highest since 2014 on reduced output and plant turnarounds. So to conclude the prices for VAM will soar up further as there is significant hike in the prices of Acetic Acid.
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• This week oil prices have followed volatile trend. On Thursday, prices plunged, by the prospect of the first increase in OPEC output since 2016 in the face of concern over supply from both Venezuela and Iran, while a surprise rise in U.S. crude inventories raised doubt over seasonal demand.
• On Thursday, closing crude values have decreased. WTI on NYME closed at $70.71/bbl; prices have decreased by $1.13/bbl in compared to last closing prices. While Brent on Inter Continental Exchange decreased by $1.01/bbl in compared to last trading and was assessed around $78.79/bbl.
• This discussion about possible OPEC supply increases after the June meeting has put a brake on the oil price for the time being, so $80 is a big hurdle to overcome. If prices get above there, that will further intensify and increase the likelihood that OPEC will do something. It's going to be very difficult to overcome this level on a sustainable basis before the OPEC meeting.

$1 = Rs. 67.75
Import Custom Ex. Rate USD/ INR: 68.65
Export Custom Ex. Rate USD/ INR: 66.95