21 September 2007 16:19 [Source: ICIS news]
LONDON (ICIS news)--European methyl methacrylate (MMA) buyers and traders reacted with cynicism to the news on Friday that two European sellers were to announce fourth-quarter price increases of €80/tonne ($112/tonne).
Sources close to both producers, Rohm and Haas and Arkema confirmed they were to announce price increases on the basis of an imminent shutdown at one of ?xml:namespace>
“We are ramping up contract discussions,” said a source close to Arkema.
“Several European producers are facing production issues in September and October, and this, alongside existing tightness in the market and volatile feedstocks, had caused us to make the increase. We are going to be very firm on this number.”
The production issues mentioned were widely said to be a two to three week turnaround at Lucite’s 200,000 tonne/year major plant at Billingham in the UK rumoured to begin on 24 September.
However, buyers and traders gave the announcement short thrift, saying that producers were overestimating the potential impact the outage.
“It is contrary to what we were told three months ago,” said one buyer, adding “just because they have announced it, it doesn’t mean that it has happened. They do this every quarter. Sometimes they achieve it, sometimes they don’t.”
The buyer source said that a rollover was equally likely, should Lucite return with strong production.
“I’d imagine that there would be a price rise,” said another buyer. “Demand hasn’t really slackened off. I’d guess we’ll say €40/tonne, and eventually we’ll all end up at €60/tonne. It all depends on Lucite. A rollover might well happen.”
Buyers and sellers agreed it was still too early to guess at the outcome of fourth-quarter negotiations. Many said that after the European Petrochemical Association conference in early October things would become clearer.
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