US April MMA prices expected to increase on feedstocks, demand

05 April 2012 20:37  [Source: ICIS news]

HOUSTON (ICIS)--US April methyl methacrylate (MMA) contract prices are expected to move higher, tracking more expensive feedstocks and improving demand, sources said on Thursday.

US producers Evonik (5 cents/lb), Lucite (9 cents/lb) and Dow Chemical (10 cents/lb) have price-increase nominations on MMA effective 1 April, or as contracts allow.

Combined with nominations in March, producers are looking to push US MMA contract prices higher by 18-21 cents/lb ($397-463/tonne, €302-352/tonne) from February.

This coincides with a 20 cent/lb increase in the February barge acetone contract, which is the price market for the largest buyers, all of which are MMA producers.

In March, buyers exhibited a strong amount of pushback, but resistance for the April increases has dipped on improved downstream demand.

Sources said several major paints and coatings companies are reporting March and April sales 5-10% higher year on year, aided by warmer weather.

“Right now, our business is doing very well, and we don’t feel we’ve reached the traditional coatings season,” a buyer said.

However, several other buyers are arguing that the surge in March and April demand reflect an earlier-than-normal start to the coatings season, and that the traditional back end will see lower-than-normal sales as a result.

“It’s too early to tell, but my experience is that unless the construction sector truly comes back, there’s no reason for there to be this much new demand,” a buyer said.

Currently, March US MMA prices are assessed by ICIS at $1.20-1.30/lb FD railcar (free delivered via railcar).

($1 = €0.76)

By: John Dietrich

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