FocusAsia MMA may extend gains thru April on high feedstock costs

08 March 2011 06:15  [Source: ICIS news]

MMA and its downstream PMMA have strong applications in the light guided panels of flat-screen televisions that use the latest light emitting diode (LED) technology.By Junie Lin

SINGAPORE (ICIS)--Methyl methacrylate prices in Asia may continue to rise through to April, after gaining about 2% in the past two weeks, largely on account of rising feedstock costs, market sources said on Tuesday.

Spot MMA prices broke free from 24 weeks of stagnation in late February, according to ICIS data. Surplus inventories of downstream light-guided panels (LGP) for light emitting diode (LED) TV industry had kept MMA demand in doldrums since September last year.

But most producers anticipate a revival of demand that should support higher prices going forward.

On 4 March, MMA cargoes of 500 tonnes or higher were assessed at $2,380-2,450/tonne (€1,714-1,764/tonne) CFR (cost and freight) SE (southeast) Asia, while those cargoes with less than 500 tonnes were at $2,530-2,560/tonne CFR SE Asia, according to ICIS.

MMA sellers said they had successfully implemented an average price hike of $50-100/tonne on small to mid-sized buyers from the cast sheet and emulsion sectors this month.

Initial resistance to aggressive price increases faded in the face of soaring costs of MMA feedstocks like methyl tertiary butyl ether (MTBE), market sources said.

“Prices should have still some room to go up in April, as feedstock costs had risen so much,” said a trader.

MTBE prices had increased by more than 6% week on week to $1,050-1,100/tonne FOB (free on board) Singapore in the week ended 4 March, ICIS data showed.

The surge in MTBE prices, which were firmly above $1,000/tonne mark, was due to robust global oil futures, amid oil supply disruption from OPEC producer Libya, traders said.

MMA prices had to adjust accordingly for producers to generate margins, market sources said.

Most producers were mulling raising prices in April by $100/tonne from March, expecting strong demand as flat-screen television manufacturers gear up production. Demand from this sector has been driving up demand for MMA and its downstream PMMA over the past years.

PMMA has strong applications in the light guided panels of flat-screen televisions that use the latest light emitting diode (LED) technology.

Meanwhile, tight supply due to outages at regional plants and scheduled turnarounds through the second quarter would also help push prices higher, market sources said.

Fresh supply was expected in Thailand, with the start-up of a 70,000 tonne/year MMA facility by mid-year, but demand was still expected to outstrip supply in Asia, they said.

Additional reporting by Felicia Loo

($1 = €0.72)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Junie Lin

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