22 March 2012 16:49 [Source: ICIS news]
(recasts, adding current spot prices in third paragraph and quotes in seventh paragraph)
LONDON (ICIS)--Methyl methacrylate (MMA) spot prices in Europe have reversed their downward trend to climb by more than 8% in the past four weeks on firming feedstock costs and limited availability, sources said on Thursday.
Prices had bottomed out in January at €1,575-1,645/tonne ($2,072-2,164/tonne) FD (free delivered) NWE (northwest Europe), after falling since June 2011 on better availability and reduced buying interest. Spot levels started to move back up at the beginning of March on rising raw material costs and improving demand.
The spot range is now at €1,700-1,800/tonne FD NWE.
The feedstock propylene contract price has increased by €200/tonne since the beginning of the year, while acetone contracts have followed a similar pattern, and acetone spot prices have increased by 80%, mostly because of availability problems.
MMA demand has picked up as spring is the peak season for the construction industry, and as buying confidence has slowly returned to the market.
“Demand is good, as expected for this time of year,” a major buyer said. Sources said the demand outlook for the second quarter is largely healthy, particularly from the coatings sector. However, anticipated offtake from the polymethyl methacrylate (PMMA) sector is less optimistic, despite improved buying interest from the industry.
“I sold one truckload yesterday for April delivery at €1,800/tonne FD,” a trader said. Another said two truckloads of MMA had been sold this week at €1,790/tonne.
Traders and producers expect prices to firm in the coming weeks and months, with most indicating that spot prices will be above €1,800/tonne in April.
“In Europe for acrylate monomers, it’s not so much supply/demand, it’s a cost pressure,” a trader said.
First-quarter MMA contracts settled at €1,730-1,780/tonne FD NWE. UK-based MMA producer Lucite International announced last week that it would be aiming for a €180/tonne increase in its second-quarter contracts, based on firming feedstock costs, rising global MMA prices, improved demand and supply limitations.
March contracts rose slightly, and April monthly contracts are expected to spike after producers said significant increases would be targeted. One producer said this week that it would target a €180/tonne hike in its April contracts. Further price rises are expected in May.
The trader said: “Although everybody is a bit careful, the reality is that prices will go up a lot.”
($1 = €0.76)
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