FocusAsian GP PMMA delay June offers on weak crude futures

01 June 2012 08:05  [Source: ICIS news]

By Junie Lin

BRISBANE (ICIS)--General purpose (GP) polymethyl methacrylate (PMMA) offers for June in Asia have been put off for a week because customers were uncertain of demand amid softer energy futures, producers said on Friday.

Sentiment in the Asian PMMA market has weakened recently as a result of weak crude futures and continuing eurozone debt crisis.

The near-term outlook for PMMA prices also remains uncertain because of the persistently weak demand from the downstream sectors, especially the key China market, industry sources said.

PMMA prices were unchanged week on week at $2,410-2,550/tonne (€1,952-2,066/tonne) CFR (cost & freight) China in the week ended 31 May, ICIS data showed.

Some GP PMMA customers were said to be lacking the confidence to place PMMA orders for June shipment cargoes because of the bearish outlook for export orders, which in turn was a result of weak business conditions in the region and abroad.

Exports to Europe have been especially weak this year because of the eurozone debt crisis which so far has no end in sight.

Even Asian PMMA producers said their sentiment is bearish, in view of the prevailing weak macroeconomics conditions and falling crude prices and lower than expected growth in China.

“Demand is weak [in Asia] especially in China,” one South Korean producer said.

The buy-sell gap for June might be wide because of increasing buyer resistance, a regional producer said. “[Buyers] may want to ask for discounts,” the producer added.

On the other hand producers might be reluctant to cut prices because they want to recoup lost margins due to firm upstream methyl methacrylate (MMA) costs.

A couple of producers said they may have to shelve their original intention to raise prices by at least $50/tonne for June PMMA given the current weak market sentiment.

Upstream bulk MMA prices of more than 500 tonnes have increased more than 7% since early February to $2,230-2,280/tonne CFR SE (southeast) Asia in the week ended 23 May, ICIS data showed.

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

GP PMMA goes into making of household products such as cosmetics bottles, and its automotive applications include car tail lights and speedometer covers.

($1 = €0.81)


By: Junie Lin



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