US MMA producers and consumers tug over Q3 prices

22 June 2005 20:53  [Source: ICIS news]

HOUSTON (CNI)--US consumers of methyl methacrylate (MMA) are challenging producers’ forecast of growing demand and a tight second half market, sources said Wednesday, citing a slowing Asia market and reduced MMA feedstock costs.

 

But one major US producer predicts US MMA demand will keep pace with the growth in the US economy.

 

The forecast comes amid reports of steady economic growth for the US economy and underlying robust fundamentals.  That producer and another note that current MMA demand is matching 2004 levels or better after a soft patch earlier this year.

 

US MMA supplies have remained balanced this year, even during the soft patch, according to a key supplier.  Just as the market softened, two US MMA producers each put a plant into maintenance turnaround early in the first half.  Those shutdowns took nearly 32,000 tonne of MMA capacity out of play. 

 

Producers also insist that demand outside the US is strong, contesting consumers’ arguments of slowing Asian demand. On the contrary, said one US producer, Asian demand is strong, with the LCD sector alone expected to grow by about 27,000 tonne this year.  The company argues that demand from other consumer sectors - such as transparent acrylonitrile butadiene styrene (ABS), styrene/MMA and acrylic solid surface - also is expected to continue growing.

 

Producers contend that global supplies will tighten in the third quarter as seasonal demand grows and as several scheduled plant turnarounds take effect in Asia and Europe.

 

Still, US MMA consumers note that producers have failed to make price announcements for the third quarter beginning 1 July.  Ordinarily, producers would signal price hikes at least 15 days before the quarter start.

 

With no firm price indications in place for the third quarter, MMA consumers predict that, at worst, second quarter prices will roll over.  Some buyers are hoping that prices might even take a dip by 2-4 cents/pound ($44-48/tonne), reflecting slow Asian demand and lower propylene and acetone feedstock costs for MMA producers.

By: Ron Coifman
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