US October MMA contracts roll over on softer demand

12 October 2012 19:56  [Source: ICIS news]

HOUSTON (ICIS)--US October methyl methacrylate (MMA) contract prices rolled over, as softer demand offset higher feedstocks, sources said on Friday.

US October MMA contracts 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).

“The higher feedstock costs were balanced by weaker demand from paints and PMMA [polymethyl methacrylate],” a buyer said.

The fall in demand is being largely attributed to seasonal factors, especially in the paints and coatings market.

Sources said that cooler weather is decreasing painting activity for existing homes and has led to less construction activity for the building of new homes.

On the PMMA side, sources said that demand for consumer electronics is softer than forecast, mostly because of weak economic conditions and a lack of holiday build.

“Sales have been going down. Nobody is looking for end products,” a buyer said. “Not all of it is related to seasonal factors.”

Key feedstock barge acetone prices have risen by 1 cent/lb since July, but MMA contract prices have fallen by 2.5 cents/lb in that timeframe.

Buyers added that it will be difficult to increase MMA prices until 2013 because of expected destocking of inventories in November and December.

“Now is not the time to be raising prices,” a buyer said. “People are drawing down inventories and there’s no momentum to buy.”

Barge acetone prices could increase in October because of a surge in upstream refinery-grade propylene (RGP) values, which are 5-6 cents/lb higher since mid-September.

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

($1 = €0.77)

By: John Dietrich

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