28 January 2011 23:59 [Source: ICIS news]
LONDON (ICIS)--The European methyl methacrylate (MMA) first-quarter (Q1) contract settled up on the high end, at €2,000/tonne ($2,740/tonne) FD (free delivered) NWE (northwest Europe), because of increased raw material costs in a balanced to tight market, sources said on Friday.
Q1 agreements rolled over on the low end and increased by €65/tonne FD NWE on the high end, widening the range compared with that seen in Q4 2010.
Contracts for the quarter were agreed at rollovers to increases of up to €120/tonne FD NWE.
“We have settled our quarterly contracts at a rollover,” a major consumer said.
“Our contracts are at a little below €1,860/tonne. Next quarter could be a different thing altogether, of course. For now, there has been a general loosening of material and demand should pick up in the second quarter,” the consumer explained.
Q4 agreements were settled as low as €1,800/tonne FD NWE and as high as €2,400/tonne FD NWE, according to buyers and sellers.
Some producers quoted numbers on the low end of the range and a handful of buyers quoted numbers on the high end of the range.
Another buyer settled its contracts at €1,950–2,000/tonne FD NWE, with increases of €40–70/tonne FD NWE.
A consumer that had concluded its contracts at €1,800–1,900/tonne FD NWE, with a €50/tonne FD NWE increase said: “We had a big increase in the fourth quarter, I was hoping for a rollover.”
The rise in the cost of feedstocks methanol, acetone and ammonia were causing concern across the industry. Q1 methanol contracts went up by €38/tonne FD NWE, the January acetone MMA contract price settled up by €72/tonne FD NWE from December and the cost of ammonia continues to rise.
A producer said: “Margins have slipped back and costs have just rocketed forward.”
“We’ve been explaining to customers that we have a need for higher returns and better margins,” another producer said.
($1 = €0.73)
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