Feedstock acetone surge pushes March US MMA contracts up by 9%

08 March 2012 20:18  [Source: ICIS news]

HOUSTON (ICIS)--US March methyl methacrylate (MMA) contract prices were assessed 9% higher on Thursday, but a 47% surge in feedstock acetone is expected to push MMA prices higher still.

US March MMA contract prices were assessed by ICIS at $1.20–1.30/lb ($2,646–2,866/tonne, €2,011–2,178/tonne) FD railcar (free delivery via railcar).

That represents an increase of 10 cents/lb from the February contract price of $1.10–1.20/lb.

With key feedstock barge acetone prices surging by 20 cents/lb in February, producers said the costs must be passed downstream.

Buyers initially argued against the price-increase nominations of 8-13 cents/lb, but mostly relented in recent weeks. However, several buyers said they had some protection against the higher prices in their contracts.

With warmer-than-normal weather in several parts of the US, as well as pent-up demand as a result of colder-than-normal summers during the past few years, the coatings segment of the MMA market was showing healthy demand for material, a producer said.

Several coatings buyers said sales volumes are slightly higher or stable year on year, and agreed that warmer weather is helping.

In the plastics market, recent economic news has been more optimistic than reports from the end of 2011, but demand for MMA there remains stable at best.

Supply of MMA is balanced, but could tighten in March and April as several major US producers are experiencing feedstock issues.

Sources said two major US MMA producers are looking for 3,000 and 5,000 tonnes of MMA in order to fill contract obligations, but overseas sellers are reluctant to part with material because of tight supply situations.

An MMA buyer said spot prices have risen to $2,800/tonne on the news of the US producers’ needs.

Major US producers include Dow Chemical, Evonik and Lucite.

($1 = €0.76)

By: John Dietrich

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