Introduction
Recently, China's domestic vinyl acetate monomer (VAM) market has maintained an upward trend. Firm upstream raw material cost support, combined with tighter supply caused by industry plant maintenance, has left spot market circulation tight. The release of some downstream rigid demand has continued to push VAM market quotations higher.
Raw Material Prices Continue to Rise, Strengthening Floor Support
Escalating geopolitical conflict has increased supply risks, and international crude oil prices have continued to rise. The closure of the Strait of Hormuz, continuous destocking of port methanol, inland cargoes being shipped to ports, and planned plant maintenance not resuming as expected have led to tight inland methanol supply. Driven by this situation, methanol futures and spot prices have risen sharply, hitting a new high in nearly five years. Under the impetus of significantly higher costs and unexpected failures at some units, glacial acetic acid market prices have continued to rise. On the ethylene side, constrained by tight feedstock supply, South Korean cracker operating rates remain at low levels, with limited room for increase. Meanwhile, several crackers in Japan and South Korea are scheduled to enter maintenance from late September to October, and subsequent shipping volumes are expected to tighten further. Coupled with stronger macroeconomic sentiment during the week, USD-denominated offers have been raised successively. Higher raw material procurement costs for VAM producers have provided rigid support for spot prices. Producers' willingness to adjust prices has strengthened, and they have actively pushed up spot quotations, making the cost side the fundamental driver of this market run.
Supply-Side Plant Maintenance Disruptions Tighten Spot Supply
Supply-side disruptions have been frequent, tightening circulating spot resources in the market. Ningxia Baofeng's 100,000 mt/year unit remains shut for maintenance and must continue to outsource VAM to ensure stable downstream EVA production. Fujian Haiquan's 200,000 mt/year unit and Guangxi Huayi's 300,000 mt/year unit, affected by tight feedstock supply, have entered a reduced-load operating cycle. Overall effective industry output has contracted, limiting incremental domestic spot supply. At the same time, overseas plant operations have fluctuated, import arrivals have declined, and external supplementation is insufficient. With total domestic spot circulation tightening, producers are prioritizing deliveries against long-term contract orders. Sellable spot in the merchant market is limited, and the tight supply has supported producers in continuing to hold prices firm.
Downstream Rigid Demand Recovers; Exports Provide Marginal Increment
Operating rates in the downstream ethylene-vinyl acetate (EVA) industry have increased from earlier levels, driving a narrow increase in VAM demand. The polyvinyl alcohol (PVA) industry's operating load is generally stable, providing rigid consumption of VAM. Traditional downstream sectors have been generally lackluster. Downstream plants such as VAE emulsions, adhesives, and coatings mostly adopt a buy-as-needed model and resist high-priced feedstock. However, expectations for the traditional "Golden September" peak season have boosted downstream stocking sentiment, and traders have become more active in restocking, providing some floor support to the spot market and warming up trading sentiment. Nevertheless, large-scale concentrated stocking has not yet emerged, and some rigid demand remains to be released. At the same time, overseas inquiries have increased, and export order growth expectations are relatively high, providing additional support to the domestic market.
Driven by supply and costs and supported by incremental downstream demand, VAM prices have shown a sharp upward trend. As of September 10, taking petrochemical prices in the East China market as an example, high- and low-end negotiations stood at 7,550–7,600 yuan/mt, up 9.39% day-on-day, up 643 yuan/mt from the previous week, a weekly gain of 10.1%, and up 1,250 yuan/mt from the beginning of the month, a gain of 19.76%.
Outlook
In the short term, with cost support and the continued tight supply pattern, domestic VAM market prices are likely to remain high and firm, with the market mainly fluctuating at high levels, and prices may still have room to rise. In the medium to long term, it is necessary to continue tracking raw material price trends, domestic plant maintenance and restart plans, and changes in downstream demand.
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