Europe MMA/PMMA players await methanol impact

11 October 2007 16:47  [Source: ICIS news]

LONDON (ICIS news)--European buyers and sellers of methyl methacrylate (MMA) and downstream polymethyl methacrylate (PMMA) are steeling themselves for the impact of a €162/tonne ($228/tonne) increase in methanol feedstock for the fourth quarter, they said on Thursday.

Where buyers in previous weeks had been sceptical of proposed hikes of as much as €100/tonne on PMMA and €80/tonne on MMA, they seemed reconciled to the idea of rises of some kind in the final quarter after news that methanol had seen such large-scale increases.

 “When I hear this kind of increase on raw materials, it’s difficult to see how we can avoid them being passed down. I suppose an increase of €50/tonne could be in order,” said one MMA buyer on Thursday.

Sellers, meanwhile, expressed concerns over the effect increases on methanol would have on their margins, and said that they would now become more bullish on ensuring the proposed increases were seen through.

“We are gearing up for increase announcements,” said a source at one major European PMMA producer, also on Thursday. 

“Monomer [MMA] is being driven up by methanol and as a result we will be taking a massive hit to our margins. We intend to put an increase of about €100/tonne out. Maybe we won’t see the full effect of them this quarter, but we are already talking into 2008, so maybe it’ll be over quarter four and quarter one.”

Methanol is a central feedstock for MMA, which is in turn the major component in the production of PMMA.

On Wednesday 10 October, several fourth-quarter methanol contracts were settled up €162/tonne FOB (free on board) Rotterdam on the €218/tonne FOB Rotterdam seen in the third quarter, according to global chemical intelligence service ICIS pricing.

Market expectations were that this number would be followed.

Third quarter MMA was settled at €1,500-1,580/tonne FD (free delivered) NWE (northwest Europe) for the same period.  PMMA pricing rolled over from the second to third quarter at €2.50-2.75/kilogram FD NWE. 

($1 = €0.71)

By: Peter Salisbury
+44 20 8652 3214

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