15 April 2011 21:53 [Source: ICIS news]
LONDON (ICIS)--European methyl methacrylate (MMA) second-quarter freely-negotiated contracts settled this week at €1,960-2,100/tonne ($2,784-3.045/tonne), an increase of €100/tonne from the first quarter, because of limited availability and high raw material costs, sources from across the industry said on Friday.
Freely-negotiated monthly contracts settled within a wide range of €1,930-2,280/tonne, with some numbers quoted by buyers and sellers above and below this range which were not confirmed elsewhere in the market. Monthly contracts increased by €20-50/tonne and by €100-150/tonne, depending on contract type.
Negotiations were tough as producers stood firm with their intended hikes.
“It was less freely-negotiated and more take-it-or-leave-it,” a buyer said about negotiations with its supplier.
“There was not much freedom involved in it at all,” the buyer added.
“Raw materials have increased by €300/tonne since December,” a producer said.
Some buyers reported quarterly and monthly freely-negotiated numbers in the low €1,900s/tonne, while freely-negotiated monthly contracts were heard at €2,400/tonne. However, these values were not thought to be representative of the majority of the market.
A formula-related monthly contract value was quoted by one large buyer within the range of €1,700-1,800/tonne.
Buyers spoke of the wide gap between contract and spot values.
“There is a large difference between contract and spot prices in the market which is not sustainable,” a buyer said.
The spot range moved down by €25/tonne this week to represent deals done at close to €2,400/tonne. According to buyers, volumes were still available at €2,300/tonne, but this was not confirmed by sellers. Buyers and sellers said spot prices were moving on an upward trend, and that values over the coming weeks would be at €2,400-2,650/tonne.
Buyers heard offers of Russian material, as well as material imported from Brazil, at €2,600-2,650/tonne.
“Something has to give. If you buy spot at €2,650/tonne, how can you make money on that? I think you’d struggle to make money buying material at €2,400/tonne,” the buyer added.
A reseller said its stocks would be severely limited for at least the next couple of months, and valued its material at €2,500/tonne.
Availability was tight, and some buyers said that they had been asked to cut back their volume requests for the coming quarter. Many said they would need to resort to buying some of their required volumes on the spot market, where prices were significantly higher than contract.
Values were assessed on a free delivered (FD) northwest Europe (NWE) basis.
($1 = €0.69)
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