Europe market dry in face of multiple force majeures
Buyers scramble for product in tight market
Demand healthy even before supply curtailments
TIGHT MARKET DRIVING DEMAND
Spot is difficult to source because customers were seeking to purchase maximum contract volumes in an already tight market.
“[The] force majeure declarations are adding more pressure on an already dry market. Customers are asking to increase to the high end of contractual commitments and are trying to preload their volumes because their plans have been scattered,” a seller said.
While end-user demand is good, with the pull from the paints and coatings season, there is a sense of caution amid the pessimistic macroeconomic news.
“Everyone is very cautious to see what happens in terms of demand,” a buyer said. “People’s pockets have been hit and something has to give at some point.”
IMPORT CHALLENGES TO REMAIN
Recent Europe purchases of product from Asia, to compensate for the first-quarter tightness in and from the US, is adding to the difficulty of finding fresh volumes from Asia.
“Europe is still very interesting but Asia is equally interesting as a market. Demand there is extremely healthy,” said a trader. “We will see product in Asia remain in Asia, and less flowing into Europe.”
Assessments of how long the force majeure situation at Celanase will continue vary, and the force majeure on feedstock acetic acid at INEOS is creating yet more tension in the global markets.
With so many curtailments to US production, it is unlikely that Europe will see new imports in the very short term.
Any potential output would be absorbed immediately by the local market.
VAM is an intermediate used to make paints, films and textiles, as well as plastics.
Post time: May-13-2022