DATE : 2017-09-08
NEOS Oxide is planning to build a vinyl acetate monomer (VAM) plant with annual production capacity of 300,000 tonnes in Europe with capital expenditure (capex) between €100m and €500m, a spokesperson for the Switzerland-headquartered petrochemicals major said on 5 September.
“Our VAM project represents a further major investment for INEOS”, Graham Beesley, INEOS Oxide’s CEO
The spokesperson added the engineering studies being carried out at the moment would be finalised “during the course” of 2018, when the company would announce the final location for the plant. It expects to start up the plant in 2020 or 2021 at the latest, it added.
The company is considering to locate the new VAM plant at one of its three petrochemical sites – Saltend in the UK’s northern city of Hull, Koln in Germany or Antwerp in Belgium.
“As mentioned, the amount of the investment depends on the outcome of the work we are carrying out now but this will range from €100 plus million upwards.” INEOS had said earlier on 5 September the rationale behind the new VAM plant was the fact that Europe is short of that product, with imports “from remote locations” helping to ease the shortage.
Chemical trade figures from the European statistical agency Eurostat consistently show VAM’s demand in the region is mostly covered by imports, which largely outnumber exports.
VAM is a key building block for a wide range of industrial applications like paints, windscreens, films, adhesives as well as for production of polyvinyl chloride (PVC).
INEOS said the three locations considered for the project had access to feedstock ethylene through pipeline or terminal supply, as well as low costs to bring VAM’s other key raw material, acetic acid.
“Our VAM project represents a further major investment for INEOS and will commit the business to a spend in the hundreds of millions of euros, whether it is a new build, or a revamp of the former VAM production facility in Saltend, Hull,” said Graham Beesley, INEOS Oxide’s CEO.
“The market is at present heavily reliant on imports from deep sea locations, and our new capacity is designed to plug the gap and improve supply dependability to our customer base.”
VAM MARKET CALM AFTER HARVEY; POTENTIAL FOR HIGHER FUTURE PRICING
European vinyl acetate monomer (VAM) market reaction to potential fall-out from hurricane Harvey in Texas has continued to be fairly muted for prices in the near term, sources said on 1 September.
Expected increases in September are comparatively modest, and reflecting how suppliers read the changing dynamics of the market before the hurricane struck. However, while sellers generally appear to be targeting fairly small increments this month, the prospect for values further ahead is more pronounced.
Suppliers, along with other players, still see the situation in Texas as very unclear. For that reason, they seem to be adjusting their current price ideas mainly in line with those factors that were already apparent a week before. One said it was going out with a proposed increase on the back of changes in supply-demand fundamentals for September and costs increases before the damage to petrochemicals complexes around Houston.
While one large supplier believed it was “stupid” not to take into account the evident disruption caused by Harvey in setting price targets, while others maintained that there is a general lack of visibility at present.
One cited damage to pipelines, sufficient power supply and quality of stocks in storage tanks among a number of specific issues that needed to be appraised before it would be possible to assess the market impact of the current outages. However, all players acknowledged that there will likely be profound and widespread repercussions from the disaster.
LyondellBasell has declared force majeure on acetic acid and VAM in the US but has not yet done so for European customers, as stocks are currently available in the European market. A company executive acknowledged however that all theatres were likely to be affected as a result of the present crisis, which was not likely to go away any time soon.
The executive stated that the company is refraining from spot sales for the time being, emphasising that stability was the most important objective, with meeting obligations to loyal, regular customers therefore being a priority. Almost all other sellers are also abstaining from spot offers, although other motives, chiefly caution, are also playing a part.
A trader said, “Everyone is unwilling to offer. Everyone is sitting on their stocks and trying to consider the consequences [of Harvey] and for VAM it looks worse than on other products.”
Anticipated shortage of material will make stocks already in Europe very valuable, one supplier asserted. Another commented that he had hoped to retrieve the value of the re-imposed 5.5% EU import duty. “Now you can be…. sure we’ll try to get it back.”
Source Icis News