14 March 2013 16:52 [Source: ICIS news]
LONDON (ICIS)--The polymethyl methacrylate (PMMA) market in Europe could see its first price increase in a year, as second-quarter contract discussions point to potential price hikes, sources said on Thursday.
PMMA prices have been falling since the third quarter of 2012 on poor demand and oversupply, as consumer confidence has been sapped by eurozone debt concerns.
One producer said the current situation is unsustainable. “The increased costs of production are putting pressure on margins so we are looking very closely at opportunities to increase prices to recover some of those cost increases,” it said.
“There is still spare production capacity because of the overall flatness of the market which has caused price erosion in the PMMA sector.”
Although demand remains flat, raw material costs are firming and exerting upward price pressure on the market. Since the beginning of the third quarter, feedstock propylene prices have risen by over €200/tonne ($260/tonne).
A PMMA sheets producer said: “In terms of costs, it is clear raw material propylene is really pushing us. We have absorbed the costs for many months, but now we just cannot do that. So we need to push for increases.”
The producer added discussions had already started and consumers understood that prices need to go up. “But now it’s all about the magnitude,” it said.
One PMMA resins buyer said: “For the second quarter we are looking at a price increase. That’s what suppliers are looking for, something they would like to have. We will see a slight increase in Q2 but we don't know the magnitude.”
The buyer added it could only take a small increase. “We will go into a fighting position if they [producers] target a big increase.”
Resins and sheets producers said they are seeking triple-digit increases for second-quarter contracts.
“One thing is clear, we will pass increases but we don't know about the price. People understand that the prices need to go up,” the second producer said.
PMMA is currently priced at €2.00-2.30/kg FD (free delivered) NWE (northwest Europe), although material is also being offered at €1.90/kg FD NWE.
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 taillights. The second-largest use is in construction (pool and sanitary ware, architectural fittings), and glazing/signage.
($1 = €0.77)
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