22 November 2012 20:24 [Source: ICB]
Polymethyl methacrylate (PMMA) is an acrylic polymer that has high ultraviolet (UV) resistance and is available as resin or sheet. About two-thirds of consumption is in sheets produced by extrusion or casting, while the remainder is moulded into various shapes.
PMMA's primary use is in car headlamps and tail lights. The second-largest use is in construction (pool and sanitary ware, architectural fittings) and glazing/signage. Other uses are household appliances, optical media (DVDs, lenses), electronics, mobile phone displays, cosmetics packaging, toys, pens and furniture.
Global PMMA production and demand are driven by the Asian market, where operating capacity totals around 497,000 tonnes/year. European capacity is around 115,000 tonnes/year.
Demand for PMMA resins in Europe is stable, while buying interest for extruded sheet has been stable to poor since the second half of 2011.
Demand from the construction sector is lacklustre, owing to European government restrictions on spending because of deficit reduction programmes as well as low economic growth in the region. Buying interest from the automotive sector has also dipped on poor macroeconomics.
Producers are looking to regain margins, but with market volatility and many unknowns regarding future demand, most are adopting a "wait-and-see" stance.
European PMMA fourth-quarter contracts rolled over from the previous quarter on lacklustre demand in a long market. Contracts settled at €2.20-2.40/kg ($2.78-3.04/kg) FD (free delivered) NWE (northwest Europe).
PMMA demand is weak, particularly in southern Europe, because consumer confidence has been sapped by eurozone debt concerns. The instability in the global economy is affecting industrial production, and despite upstream cost pressure, it has proved a challenge to pass on increases downstream, where buying interest has dwindled.
Spot activity is limited, but a range of €2.20-2.40/kg FD NWE is deemed representative for medium-volume spot buyers.
Suppliers have been concerned about the impact of raw material costs on production margins this year, and had aimed to achieve €100/tonne hikes this quarter to recover costs. Nevertheless, there is some expectation that prices may roll over or decrease in the first quarter of 2013, because of low demand.
Demand has not been as healthy as players would have liked. The market remains cautious amid economic instability, and inventories are being carefully managed.
Consumption levels are steady to soft, and most participants are likely to begin end-of-year destocking in the coming weeks. Demand in 2013 is expected to remain flat with 2012.
Upstream, methyl methacrylate (MMA) fourth-quarter 2012 contracts have fallen owing to the length in the market and lacklustre demand, despite upstream pricing volatility.
PMMA is produced from polymerising MMA and several processes are in operation.
For glazing uses, some MMA can be pre-polymerised in a continuous stirred tank reactor and the resulting viscous liquid is fed into a series of flat glass plate-like moulds. This type of batch operation is very cumbersome, so continuous polymerisation/cast technologies also operate. In belt polymerisation processes, the MMA/PMMA syrup is injected between continuous highly polished metal belts. Continuous and batch solution processes are also known.
Japan's Mitsubishi Rayon developed a recycling process that produces MMA monomer from waste PMMA using sand as a thermal catalyst, then produces PMMA from the monomer.
The costs of feedstocks MMA and acetone are likely to influence 2013 pricing, along with supply and demand dynamics.
Demand forecasts from the automotive sector are poor for the first quarter in 2013, with talk that levels might be lower than Q4.
Overall consumption levels are expected to remain flat, in line with this year's volumes.
European demand has grown by around 3% over the past few years. Asia and production of liquid crystal display (LCD) screens have been key drivers of world growth, but demand for flat-screen televisions and monitors has fallen from the robust levels seen in 2010 and the first half of 2011, because of the economic crisis.
Uncertainty clouds the market as players wait to see whether there will be any upturn in demand. Global output will continue to be affected by the downturn in the automotive and construction sectors.
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