Indian VAM Prices Dip on Sluggish Demand; Supply Set to Improve with Celanese Restart

 Key Highlights

• VAM prices fall to ₹71.00–₹71.50/kg on low demand from paints and adhesives. 
• Celanese’s Singapore unit to resume production, improving supply outlook. 
• Downstream demand weakens due to early rains, affecting trading sentiment. 
• Experts advise caution as soft demand and incoming supply may lower prices further.

VAM Price Trends and Bulk Deal Insights

• Vinyl Acetate Monomer (VAM) prices in the Indian domestic market declined by ₹1/kg this week amid subdued demand from key downstream sectors. The latest bulk deal prices are:
  A. ₹71.00/kg (Ex-Kandla)
  B. ₹71.50/kg (Ex-Hazira)
  (Prices based on 60-day payment terms)
• Trader quotes were slightly lower, with offers around ₹70.50/kg (Ex-Kandla) under similar credit terms.
• Week-on-week, prices have dropped by approximately ₹1.5/kg, driven largely by weakened demand from the paints and adhesives industries following the first half of May.

Supply Set to Improve as Celanese Restarts Operations

• In April 2025, VAM inventories in India remained tight due to limited vessel arrivals, as Celanese’s VAM production unit in Pulau Sakra, Singapore, entered annual maintenance on 15th April. However, the plant is expected to resume operations this week, and healthy shipments are scheduled for arrival in India during June, likely easing supply concerns.
• Demand has tapered off notably in the paints, coatings, and adhesives sectors due to early seasonal rainfall. A leading Indian paint manufacturer confirmed a dip in demand. Despite this, the same manufacturer has resumed domestic production of Vinyl Acetate Ethylene (VAE)-based paints—marking the first such instance in India. This development may offer marginal support to VAM consumption going forward.
• Market participants noted that replacement costs for importers are relatively low, even as feedstock acetic acid prices remain firm. Importers are hesitant to build inventories amid expectations of price correction. One major importer remarked that elevated acetic acid prices in Asia - fueled by tight supply and strong acetyl demand—are likely to raise VAM production costs in the short term.
• Demand from downstream applications such as Polyvinyl Alcohol (PVA), Vinyl Acetate Ethylene (VAE), and Ethylene-Vinyl Alcohol (EVOH) showed signs of improvement in early May but has since slowed due to changing weather patterns.
• Trading activity from paints, coatings, and adhesives manufacturers has dropped significantly. A trader cautioned that this soft demand, coupled with the expected increase in supply from Celanese, could exert further downward pressure on prices.
• India's monthly VAM demand is estimated at 22,000 tonnes.

Global and Indian Chemical Market News 

• Crude Oil (WTI): Up 0.65%, closing at $61.92/bbl.
• FOB Singapore Naphtha: $565/MT.
• Natural Gas: Up 0.74% to $3.30/MMBtu.
• Methanol (CFR China): $258/MT.
• Acetic Acid (FOB China): $330/MT.

Expert Opinion and Strategic Recommendations

• Experts anticipate a short-term price correction in the Indian VAM market, primarily due to soft demand from paint, coating, and adhesive segments as the seasonal transition dampens consumption.
• Given the anticipated recovery in supply and the possibility of further price adjustments, buyers are advised to adopt a wait-and-watch strategy to navigate the evolving market landscape effectively.