US May MMA prices tighten on strong demand, falling feedstocks

21 May 2012 22:32  [Source: ICIS news]

HOUSTON (ICIS)--US May methyl methacrylate (MMA) contract prices tightened as demand remains healthy but feedstock costs started to drop, sources said.

US May MMA contract prices were assessed by ICIS at $1.24-1.30/lb ($2,734-2,866/tonne, €2,133-2,235/tonne) on an FD (free delivered) basis.

April prices were assessed at $1.20-1.34/lb FD, keeping the average MMA contract price in the US stable at $1.27/lb FD.

Sources said on Friday there had been a nomination from a major producer for an increase of 3.5 cents/lb, but that rollovers were what the market settled at.

MMA demand was mixed, with several buyers and producers saying the US coatings season is still robust and not slowing down.

“Demand is doing very well, especially in the coatings market,” a producer said. “People are still running full-out and we’re seeing more optimism in the market.”

Other buyers argued that although demand for coatings is healthier year on year, demand has dropped since a boom in late March and early April.

These buyers are also expressing concerns that the earlier-than-normal surge in demand for coatings will lead to an earlier-than-normal end to the US coatings season.

“It’s looking more and more like the coatings season started early, and demand won’t be that much improved over last year,” a buyer said.

Feedstock costs are also expected to fall in the coming months, with cheaper refinery-grade propylene (RGP) expected to lead to cheaper acetone.

However, a producer cautioned that it will take more than a month for those savings to reach the MMA market.

“It takes a while for the cheaper propylene to make cheaper acetone, and then less expensive MMA,” the producer said.

With the fall in feedstocks expected to knock down June or July MMA prices, there is little interest in spot material.

Several buyers said they are seeing increased offers for Asian MMA, but are hesitant to purchase it in the face of expected drops in the US price.

Major US producers of MMA include Dow Chemical, Evonik and Lucite.

($1 = €0.78)

By: John Dietrich

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