Europe Q3 MMA contract up €250/t on tight supply, rising costs

09 July 2010 23:59  [Source: ICIS news]

LONDON (ICIS news)--The third quarter methyl methacrylate (MMA) contract price has increased by €250/tonne ($316/tonne) because of tight supply and rising costs, market sources said on Friday.

The contract settled in a pre-discounted price range of €1,730-1,785/tonne FD (free delivered) NWE (northwest Europe).

A major producer confirmed that it had increased its third quarter contracts: “Costs have progressed through the year and have continued to increase. We are all done and settled at an increase of plus or minus €250/tonne,” it said.

The producer also cited availability issues, a lack of imports coming to Europe because of the weaker euro versus the US dollar, and strong demand as reasons for the increase.

On the buying side, MMA customers confirmed that the European market was tight and that increases were incurred as a result, although one major buyer disputed sellers arguments of rising costs.

“Raw material costs went up, but MMA also went up €140/tonne in the second quarter. By going up again producers are increasing their margin,” a major buyer said, adding that its third quarter contract price had increased by €220-230/tonne.

Other large contract customers confirmed increases of €250/tonne from the second to third quarter. 

“Yes, I recognise an increase of €250/tonne. Demand is strong, higher than we ever expected and there are no imports so MMA is difficult to source.” said one consumer.

A second buyer said: “It’s [the contract price] going up. Availability is not a problem in the sense that we have contracts but there is seasonal demand, above our expectations. Spot availability? There simply is none.”

Meanwhile, spot MMA prices continued to firm in Europe because of strong demand and lack of imports being offered in the region.

One trader said it had sold Russian material at €2,500/tonne FD Rotterdam to a “sizeable customer.”

Spot MMA prices in Europe were at €2,000-2,500/tonne FD NWE, their highest ever level.

 ($1 = €0.79)

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By: Julia Meehan
+44 20 8652 3214

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