FocusChina domestic MMA prices to fall further on languid demand

19 June 2012 06:24  [Source: ICIS news]

By Monica Cai

SINGAPORE (ICIS)--China domestic methyl methacrylate (MMA) prices are expected to decline further, tracking falls in crude oil prices and weak downstream demand, market sources said on Tuesday.

Domestic prices have fallen by around 6-8% over two weeks because of weak demand from the downstream polymethyl methacrylate (PMMA) polymer, cast sheets and acrylic resins for coatings and emulsions sectors.

China domestic MMA spot prices were assessed at yuan (CNY) 14,500-15,200/tonne ($2,280-2,390/tonne) ex-tank east China on 15 June, plunging by CNY1,100-1,600/tonne from values as of 1 June, according to Chemease, an ICIS service in China.

Similarly, in south China MMA spot prices also shed CNY1,000/tonne DEL (delivered) to CNY15,400-16,200/tonne DEL on 15 June from spot values as of 1 June.

Some traders have been de-stocking cargoes to prevent further losses while others are staying out of the market and preferring not to build inventories in expectation of further fall in prices.

MMA buyers are not too keen to procure fresh cargoes in bulk, preferring to buy on a need-to basis not knowing where the fall in prices will stop as well as poor sales of their own products.

“We have enough inventories and are expecting Chinese domestic MMA prices to fall further,” a buyer said.

A domestic producer said: “We are monitoring the market situation now,” adding that it is supplying mainly to contract customers.

Despite short supply from China’s biggest MMA producer, Jilin Petrochemical, which is in the middle of a month-long turnaround, buyers’ sentiment continues to be bearish, market sources said.

The bearishness stems from fewer export orders by downstream producers amid a weakening global economy and the slowing down of Chinese economy as well.

Some PMMA producers say they are mulling to cut production because of poor demand.

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

Downstream buyers are understandably cautious, in view of the broader petrochemical market downturn on global economic concerns and european debt crisis.

($1 = CNY6.36)

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

By: Monica Cai

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