FocusChina’s GP PMMA price hikes for May unlikely – players

04 May 2012 06:33  [Source: ICIS news]

By Junie Lin

BRISBANE (ICIS)--China’s general purpose (GP) polymethyl methylacrylate (PMMA) producers are unlikely to implement price hikes for May successfully because of weak market fundamentals, despite rising feedstock methyl methacrylate (MMA) costs, market players said on Friday.

Most of the producers said they are trying to implement hikes of $50-100/tonne (€38-76/tonne) for May, which they added are necessary to recover their squeezed margins

Some May GP PMMA offers were at $2,550-2,650/tonne CIF (cost, insurance & freight) China, up by $50-100/tonne month on month. Other producers said they are open to discussions at above $2,400/tonne CFR SE Asia.

GP PMMA prices were assessed as unchanged week on week at $2,410-2,550/tonne CFR (cost & freight) China in the week ended 3 May, according to ICIS data.

Upstream bulk MMA prices for cargoes of more than 500 tonnes have increased by $150-160/tonne, or more than 7%, since early February to $2,220-2,280/tonne CFR southeast (SE) Asia in the week ended 27 April, according to ICIS.

However, buying resistance from buyers, especially in China, is likely to be strong because of weak downstream demand amid the Chinese economic slowdown. 

“End-users in south China may be more resistant to the higher prices because of weak export sales,” a trader in Asia said.

An import supply surplus has also hampered many producers’ efforts to hike their prices, he added.

China imported 22,402 tonnes of PMMA in March, a 2% increase year on year and a 29% increase from February, according to China Customs data.

The impetus to implement the May price hikes of $50-100/tonne has decreased in view of the supply glut following the dumping of South Korean GP PMMA cargoes, some producers said.

Around 3,000 tonnes of South Korean cargoes were dumped in China over the past three months, which also depressed buying sentiment in China, said market players.

The cargoes were heard dumped at close to feedstock MMA prices, but this could not be confirmed, they added

“The 3,000 tonnes account for more than 10% of China’s monthly demand requirements,” a producer said.

Meanwhile, discussions were hampered partially because of the Labour Day holiday in China on 29 April-1 May, some players said.

Producers faced difficulties offloading the excess PMMA supply because of the holiday and thus the shorter working month in May, which contributed to the difficulty in implementing the price hikes, said traders.

Chinese GP PMMA domestic prices remained unchanged week on week at yuan (CNY) 18,000-19,000/tonne ($2,857-2,016/tonne) DEL (delivered) in the week ended 3 May because of weak demand. 

MMA is polymerised to make homopolymers and copolymers, with the largest application being the casting, moulding or extrusion of PMMA or modified polymers.

GP PMMA is used to make household products, such as cosmetics bottles, and its automotive applications include tail-lights and speedometre covers.   

($1 = €0.76)
($1 = CNY6.30)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Junie Lin

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