Uses

Vinyl acetate monomer (VAM) is a chemical building block used in a wide variety of industrial and consumer products. VAM is a key ingredient in emulsion polymers, resins, and intermediates used in paints, adhesives, coatings, textiles, wire and cable polyethylene (PE) compounds, laminated safety glass (used in automotive windshields), packaging, automotive plastic fuel tanks and acrylic fibres. It is also used in furniture glue and chewing gum.

Most end-use markets for VAM are mature, with growth in the largest applications – adhesives, paints, paper coatings and textiles – expected only to track or trail GDP slightly. However, there are strong growth areas for VAM such as ethylene vinyl alcohol (EVOH) barrier resins, ethylene vinyl acetate (EVA) polymers and polyvinyl butyral (PVB).

Supply/demand

The freezing temperatures that hit Texas in February caused all four US VAM producers to shut down, and while each are in varying stages of restarting and ramping up to full rates, supplies remain quite limited. Much of US supply is exported, particularly to Mexico and Europe.

Prolonged shortened supplies could cause a short-term shift in trade flows as product in Asia is much more available.

Meanwhile, US VAM demand has consistently been strong in key sectors such as home construction projects, and the packaging and adhesives market.

Typically, seasonal demand has an uptick in Q2 for construction end-use paintings and coatings. But since that sector has remained elevated since 2020 amid stay-at-home orders and an increase it do-it-yourself (DIY) projects, there has been no significant increase this year.

Prices

After winter storm Uri cut 100% of US production, VAM prices spiked and have remained at high levels amid production restarts and inventory rebuilds. Strong demand for the product has contributed to elevated pricing since then.

US May contracts were assessed at 91-94 cents/lb, which is an all-time high from the start of ICIS pricing history in August 2016. Contracts have remained at this price level for both June and July.

Most VAM is sold on a contract basis, but spot export prices were also assessed notionally at fresh highs, even nearing the $3,000/tonne mark, despite a lack of available material. An easing of supplies will add pressure to high price levels, but with demand holding strong, it may put a floor on any decreases.

Technology

Acetylene-based technology was used first in the commercial production of VAM with the gas phase process preferred to the liquid phase reaction.

Ethylene has now become the preferred feedstock with the gas phase route used due to problems of corrosion and by-product formation when using the liquid phase process. This is why ethylene figures are so prominently in contract formulas.

Acetic acid is catalysed in the gas-phase reaction with ethylene and oxygen in a fixed bed tubular reactor at 175-200˚C (347-392˚F) and 5-9 bar pressure. The VAM is then recovered by condensation and scrubbing, and is purified by distillation.

UK-based BP developed Leap, a fluidised bed technology that is said to cut investment costs by 30%. Essentially, the chemistry is the same as the existing technology. The difference is that the catalyst is continuously removed and replenished, which is said to give the process much longer run times compared with the fixed-bed route.

Celanese’s VAntage process is said to raise production efficiency and lower operating costs. The technology is claimed to add production capacity equivalent to a worldscale plant at 10-15% of the cost of building a grassroots unit.

Meanwhile, Praxair received a patent for a technique using 99.95% oxygen to reduce catalyst losses and undesirable reaction byproducts, while boosting VAM yields by up to 5%.

Outlook

In the coming months, the US VAM market is likely to continue to see supplies rebuild, but market participants have noted that it could take until year end or into 2022 to see more significant availability.

Adding to the lack of available material are disruptions in the supply chain with less acetic acid available to produce VAM, and logistics issues that are delaying delivery of material into some key import countries. Another factor that could impact US exports is the Atlantic hurricane season, which could cause disruptions to the supply chain with lingering effects.

Still, there are no signs of weakening demand even as prices have climbed higher and inventory rebuilds are expected for the remainder of the year. Shifting consumer spending patterns in the wake of the pandemic and subsequent lockdowns will keep demand consistently strong even through the typically slower Q4. ■