Evonik's plan for new US MMA plant surprises many market players

05 October 2012 17:47  [Source: ICIS news]

HOUSTON (ICIS)--Several US methyl methacrylate (MMA) market players said on Friday they were surprised by Evonik's plan for a new US plant, citing what they see as long supply and weaker-than-expected demand growth.

Evonik said it plans to build a 120,000 tonne/year MMA plant in Mobile, Alabama, by mid-2015.

“I think the announcement is good, but breaking ground is better,” a market source said. “It’s pretty far away, but it’s good for purchasers.”

Several other sources agreed, citing that the new supply could lead to lower prices for buyers.

“The MMA market is already extremely long,” another source said. “It will take some time to digest the material.”

There are expectations that market growth for MMA will have to come from the consumer electronics market, especially flat-panel TVs.

However, sources said that market is not growing as quickly as expected, especially compared to projections made several years ago.

“Producers are in denial about the LED [light emitting diodes for TV screens] market being a major driver of consumption,” a source said. “I’m confused about the timing of this announcement.”

However, other sources were less surprised, saying they had heard rumors of an Evonik MMA plant being planned for several years.

“We’ve been expecting an announcement on an Evonik build for several years now,” a source said. “And the US makes perfect sense from a cost basis.”

The source added that the timing of the plant’s construction could be difficult, and noted that the plant is still in the development phase.

US MMA contract prices for September were assessed by ICIS at $1.075-1.125/lb ($2,370-2,480/tonne, €1,825-1,910/tonne) FD railcar (free delivered via railcar).

($1 = €0.77)

By: John Dietrich

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