Asia EVA market to see stable-to-soft prices in Q1

SINGAPORE (ICIS)–Asia’ ethylene vinyl acetate (EVA) market looks set for a steady-to-soft pricing amid the usual slowdown in trading activities at the start of the year and ahead of the Lunar New Year holiday, market sources said on Tuesday.

Spot prices of 18% vinyl acetate (VA) content grade are facing downward pressure as most buyers have stocked up enough inventory for the peak manufacturing season of footwear materials in the key China market. The country’s peak production of footwear – a major downstream of EVA – ends in March.

A supplier of non-Asian EVA cargoes plans to offer second-half February and early March deliveries in a bid to close deals by the end of the week, before Chinese buyers exit the market for the Lunar New year holidays on 27 January to 2 February.

“It looks like prices are going to be at a rollover or softer,” the supplier said.

“The EVA and LDPE [low density polyethylene] markets are not looking good ahead of the [Lunar] new year holidays,” a Chinese domestic EVA producer said.

For the week that ended 10 January, spot prices of 18% VA content EVA were stable at $1,430-1,540/tonne CFR (cost and freight) CMP (China Main Port), ICIS data showed. The low end of the range represents deals for non-Asian delivery cargoes that are subject to China’s 6.5% import duty.

During the same week, prices of EVA with 22-30% VA content were assessed at $1,520-1,580/tonne CFR NE (northeast) Asia; while EVA with 28-33% VA content were assessed at $1,500-1,600/tonne CFR NE Asia, an increase of $10-50/tonne, ICIS data showed.

In the downstream photovoltaic (PV) sector, China-based EVA buyers were averse to stock up on cargoes for January and February, as the cost of importing feedstocks have increased following the depreciation of the yuan versus the US dollar.

These EVA converters plan to raise their solar EVA encapsulant film prices after the Lunar New Year holidays, on the back of the recent feedstocks-fuelled price rally of EVA with 28-33% VA content.

EVA demand may increase towards the second quarter as some of these converters are looking at increasing their plant utilization rates to 60-70% of capacity in March to June, up from the current 30% of capacity. They expect demand for downstream solar panel module products to improve ahead of an expected subsidy adjustments by the Chinese government.

Meanwhile, China-based buyers from the downstream hotmelt adhesives sector, which consumes EVA with a higher 28% VA content, expect limited room for EVA prices to fall due to limited supply.

“EVA prices are stable now but there is still less supply and it’s uncertain if producers will continue to curtail output,” a China-based hotmelt adhesive maker said.

Some of these EVA users plan to increase their plant utilisation rates to 90% in March, up from the current estimates of 80% in January and 70% in February.

A handful of EVA/low density polyethylene (LDPE) swing producers in South Korea continued to focus their output on LDPE after prices hit a 2016 high in the fourth quarter.

Production of foaming grade EVA with 18% VA content from South Korea has also been reduced in favour of the PV grade EVA with 28-33% VA content.

Focus article by Helen Lee

Top photo: The footwear sector is the major downstream industry of ethylene vinyl acetate (EVA). (Source: KeystoneUSA-ZUMA/REX/Shutterstock)