FocusAsia MMA makers, buyers to pay more in Dec

28 November 2007 04:18  [Source: ICIS news]

By Nurul Darni

SINGAPORE (ICIS news)--Asian methyl methacrylate (MMA) makers and buyers are bracing themselves for higher prices in December prompted by rising feedstock costs and strong downstream polymethylmethacrylate (PMMA) demand, traders said on Wednesday.

Key producers have already started discussing December shipment parcels this week, pointing to an optimistic outlook for further price hikes, they said.

“We have to keep up with rising feedstock costs and ask for higher prices. If not, our margins will suffer,” one Tokyo-based MMA producer said.

Other like-minded producers cited tight MMA supply caused by a series of planned shutdowns in Japan, China and Thailand, coupled with a lack of deep sea cargoes from the US and Europe as factors that would drive up prices in the near term.

Spot MMA prices surpassed the $2,000/tonne CFR (cost and freight) Southeast (SE) Asia mark late last week, with buyers and sellers agreeing that the tight supply situation would continue through the end of the year.

In Japan, Mitsubishi Gas Chemical’s plant had been shut since mid-October for a month-long maintenance and is expected to restart at the end of the month or early December.

Thai MMA , a joint venture of Cementhai and Japan’s Mitsubishi Rayon, meanwhile is undergoing maintenance and will restart mid-December.

Soaring feedstock prices of naphtha, acetone and methanol also drove producers to ask for loftier prices, traders said.

The Japanese domestic market saw some producers posturing for further price hikes of around $100-200/tonne for December shipments, citing low inventory levels.

Some buyers acknowledged that they may have little bargaining power now that spot material was very limited and may have to accept higher prices.

“Of course we don’t like to pay high prices. But if we need to buy, we have no choice but to pay up,” one regional buyer said.

Increased consumption for electronic products such as LCD panels also drove up demand for MMA, with Samsung and LG ramping up production of such goods, traders said.

This peak season is expected to last until the end of the year, they added.

December shipments are expected to be pushed above the $2,000/tonne CFR mark for all regions, some traders noted, adding that offers below $1,950/tonne were no longer transactable.

($1 = €0.67)

By: Nurul Darni
65 6789 4359

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