Sellers accept cuts in Q3 contract

04 August 2003 00:00  [Source: ICB]

Europe's methyl methacrylate (MMA) producers began quarter three (Q3) by conceding up to half of the price increases achieved in the previous quarter, market sources confirm.

A dip in demand from Asia conspired with a sharp drop in raw materials prices to destroy the case for higher MMA numbers into Q3. This forced sellers to accept cuts of E30-50/tonne, bringing contract prices down to around E1400/tonne FD. Recent spot prices are seen in the E1200-1350/tonne FD bulk range in Europe.

The price fall is in contrast to the significant gains made in the MMA market in the second quarter (Q2), when producers sought increases of E100-150/ tonne. The market settled for the more modest hike of around E90/tonne, pushing prices up to E1445-1465/tonne. Higher numbers were defended on the basis of a run-up in feedstock costs coupled with limited supply from key European plants.

The July price concessions on MMA are largely due to the marked drop in acetone prices, which fell from E630-650/tonne in Q2 to E480-530/tonne by mid-July. A fall of E35/tonne in methanol prices over the same period also assisted buyers' calls for lower numbers.

In addition, increased MMA output in Asia reduced import requirements, swelling the availability of product in Europe for the spot market.

Partial shutdown for maintenance is scheduled by Lucite and Degussa in Q3. Degussa's debottlenecking at Wesseling, Germany, is now complete, adding 10 000 tonne/year to MMA output at the site.

In the US, the MMA market is very tight and price increases of several cents per pound were introduced at the start of both Q2 and Q3. 'Downstream demand continues to be surprisingly good,' one producer said. Sharp increases in acetone pricing and sustained higher natural gas costs are putting cost pressure on producers, he added. Rohm and Haas is due to bring onstream 115 000 tonne/year of new capacity in Deer Park, Texas, during the fourth quarter - an expansion originally planned for completion in 2002.





AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly