12 July 2011 05:51 [Source: ICIS news]
By: Junie Lin
SINGAPORE (ICIS)--Methyl methacrylate (MMA) bulk prices in southeast Asia have fallen for the first time in 27 months and may remain soft because of a seasonal lull in downstream demand, market players said on Tuesday.
Benchmark MMA prices for southeast Asian cargoes of more than 500 tonnes were assessed as down by $20-50/tonne (€14-35/tonne) week on week at $2,450-2,530/tonne CFR (cost & freight) southeast (SE) Asia on 8 July, ICIS data showed.
MMA cargoes of more than 500 tonnes are commonly known as bulk cargoes.
A northeast Asian producer said he settled July bulk cargoes at $50/tonne lower as compared with June at $2,450-2,500/tonne CFR SE Asia.
Some bulk cargoes were heard settled at $20-30/tonne lower month on month at $2,520-2,530/tonne CFR SE Asia, another seller said.
Other negotiations for bulk cargoes were largely at a rollover from June, at around $2,500/tonne on average, most producers and buyers said.
“Naturally, I asked for lower prices for July, but eventually I settled at a rollover,” said a major buyer in southeast Asia.
Some July offers were heard at as low as $2,500/tonne CFR SE Asia, said players.
Most July MMA nominations emerged last week, at a rollover from June, but one supplier in Japan nominated a $20/tonne month-on-month increase while citing “fundamentally tight supply”.
The seasonal lull in Indonesia and Malaysia, as a result of the upcoming Muslim fasting month of Ramadan in August, has weakened the demand for MMA in southeast Asia, market observers said.
Regional demand in Asia has also weakened, with key regions such as South Korea, Japan, Thailand and India affected by the current monsoon season, the market observers said.
In addition, the outflow of Asian MMA to the west is coming to an end as plants there are being restarted, thus removing the need to buy from Asia, they added.
Bulk prices in the Chinese domestic market are also on a downtrend because of the credit crunch in China and weaker domestic downstream demand, as the margins of end-users have narrowed.
Most sellers said that it is increasingly difficult to export product to China as buyers are having difficulty in obtaining credit, they added.
Bulk prices in the eastern part of the country have dropped by yuan (CNY) 700-900/tonne ($108-139/tonne) since early June to CNY19,100-19,800/tonne EXWH (ex-warehouse) on 8 July, ICIS data showed.
Bulk prices in southern China fell by CNY900-1,200/tonne since early June and were assessed at CNY19,500-20,300/tonne DEL (delivered) on 8 July, according to the data.
($1 = €0.70, $1 = CNY6.47)
Additional reporting by Monica Cai
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