Rigid Demand for Vinyl Acetate Decreased Noticeably

According to the China Environmental Protection Supervision Committee, the environment protection supervision in Shandong will last for a month.

Shandong is the main production area of white latex, such as Jinan, Linyi, Dezhou, Yantai and Qingdao are the major demand areas for vinyl ACETATE. The annual consumption for vinyl acetate in Shandong was 65kt, excluding consumption of ethylene-vinyl acetate copolymer (EVA) units in Levima Group, which took up around 9.77% of the total circulation volume (including the consumption of EVA units in Levima Group here). The vinyl acetate is used to produce polyvinyl acetate and other products.

The annual capacity of polyvinyl acetate in Laixi Yonglong Chemical and Qufu Huidi Chemical is over 10kt. The consumption for vinyl acetate is about 30mt per month. The consumption for vinyl acetate in some small-sized companies is in the range of 7-15mt per month. Recently, units in small-sized factories were shut and the rigid demand for vinyl acetate decreased rapidly. From mid-July, the trade volume in Shandong was below 20% of the normal level.

The demand for vinyl acetate in Jiangsu was weak. Firstly, the downstream in Jiangsu entered off-season. Secondly, many industrial parks in Jiangsu limited the amount of hazardous chemicals and raw material because of the strict environment protection supervision. Thirdly, the users in adhesive industry showed poor interest in purchasing. In mid-August, the the mainstream trade volume was about 30% of the same period last month.

The environment protection supervision will last for a month in Shandong. When the supervision finishes in September, the vinyl acetate market will enter the peak season. However, with the environment protection finishing, the reform in factories did not stop. One one hand, the downstream demand for vinyl acetate will be limited. The reason is that the small-sized adhesive factories will hardly afford the reform cost. Also, the operation of users will be flexible and users have less confidence in the vinyl acetate market in the future. On the other hand, as the supply of vinyl acetate in mainstream factories will be limited and cost of ethylene will increase, the Vinyl Acetate suppliers will be bullish about the market, which will support the vinyl acetate price. In the future, the sentiments between users and suppliers will have large differences.