13 August 2010 18:18 [Source: ICIS news]
By Julia Meehan and Helena Strathearn
LONDON (ICIS)--European methyl methacrylate (MMA) prices continue to firm and margins have started to improve as a result of lower feedstock costs, strong demand and tight supply, market sources said on Friday.
MMA spot prices this week reached record highs of €2,400-2,800/tonne ($3,077-3,590/tonne) FD (free delivered) NWE (northwest ?xml:namespace>
“If you look back to January 2009 and acetone, we are only just climbing back to where we were before MMA prices started falling – and, all the time, acetone was increasing,” said a major MMA producer.
“We kept saying to our suppliers, ‘You can’t keep pushing.’ You only have to look back less than a year ago. Arkema closed [its plant at Carling, France], and Repsol [idled its plant at Tarragona, Spain],” said the producer.
The third-quarter MMA contract was agreed at €1,730-1,785/tonne FD NWE, an increase of €250/tonne from the previous quarter, while July and August acetone contract prices combined dropped by €50/tonne as a result of weaker propylene.
However, prior to acetone’s €50/tonne price fall, contract prices had been moving up month on month since December 2009, by a total of €228/tonne, which was largely a result of rising propylene costs.
Owing to a series of production problems across
MMA buyers and sellers were finding it difficult to predict the direction of MMA prices in the coming weeks, saying that much would depend on the start-up of Arkema’s 90,000 tonne/year facility at
When asked whether the value of European MMA would continue to rise, a buyer said: “If Evonik has no further issues and demand doesn’t increase, perhaps no. But if there is still a problem somewhere and producers continue to be short, then it could rise again.”
The market has tightened considerably since major producer Evonik extended a planned shutdown at its 225,000 tonne/year facility at
Buying interest has been very strong in the MMA market, especially since May, with the PMMA sector showing particular strength as demand for LED screens has boomed, while offtake in the coatings sector has been far stronger than anticipated.
MMA producers agreed that the market is very tight and have emphasised that there does not seem to have been any sign of a summer slowdown.
While some buyers have all their volumes secured, most consumers said they are struggling each day to obtain the quantities they require. Consumers added that MMA supply has been tighter this week.
“Demand has increased more than foreseen. It is causing problems,” said a consumer.
A trader said: “If I could purchase a crystal ball to have on my desk – and if I knew how to use a crystal ball – I would know where the market was going. Because I don’t know and nobody knows.”
($1 = €0.78)
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