04 March 2013 11:18 [Source: ICIS news]
By Helena Strathearn
LONDON (ICIS)--The European methyl methacrylate (MMA) market is set to face its first price increase since September, as producers have announced their intention to raise March contract prices.
Hikes are being targeted because of higher feedstock costs, tightening supply and margin recovery, as well as to bring European prices more in line with Asian and US pricing.
There are fewer imports coming into Europe because of the euro/dollar exchange rate.
Initial indications point to targets of €75-130/tonne ($97-169/tonne) over February prices. Monthly contract prices have fallen by €95-120/tonne since September, with February prices assessed at €1,680-1,690/tonne FD NWE.
Market participants in Europe remain nervous amid macroeconomic uncertainty, and buyers said hikes at the targeted level would be resisted. Some buyers deemed increases in line with the March propylene movement as more reasonable, given the settlement last week, which was agreed higher by €55/tonne.
Players now await the outcome of the upstream acetone contract negotiations for March, with increases widely expected.
Demand in March and April is expected to pick up slightly, as is usual during spring, although it is likely it will be lower than last year’s spring demand.
“Currently we don't have too much hope for this year,” one buyer said. “Demand is getting a bit better for March and April, but not at levels seen last year.”
The maintenance turnaround at Evonik Industries' 225,000 tonne/year MMA facility in Worms, Germany, at the end of March and beginning of April, is expected by some sources to tighten the balanced market.
Spot MMA prices have moved up for a second week on tightening supply after a nine-month decline. Prices are at €1,550-1,600/tonne FD NWE.
March contract price negotiations have begun, but they are expected to be difficult and lengthy. Producers had aimed for higher prices in February, but contracts rolled over.
One trader said that although previous targets had not been met, prices would rise in March. “The only question is how much. For sure, this time it will come,” it said.
Nearly all 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. PMMA is a transparent thermoplastic, often used as a lighter, shatter-resistant alternative to glass.
($1 = €0.77)
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