22 March 2013 09:18 [Source: ICB]
US March methyl methacrylate (MMA) contracts are expected to increase on strong demand and higher feedstock costs, sources said on 14 March.
With price-increase nominations of 5 cents/lb ($110/tonne, €85/tonne) and 7 cents/lb, market sources said March contracts are generally going up by 6 cents/lb.
"The increase is partly driven by raw materials, party by supply and demand," a producer said. "The low-$1.20s/lb is where the market is settling."
February contracts were assessed by ICIS at $1.15-1.19/lb on an FD railcar (free delivered via railcar) basis.
Demand is strengthening mostly because US coatings producers are ramping up production for the busy spring and summer seasons.
"Demand last year started unseasonably early," the producer said. "This year we're expecting it to stair-step and start a little later."
However, that strong demand could face destruction from high prices, especially as upstream propylene values are falling.
"This level is the classic tipping point for this market," a buyer said. "I think this increase will go through, but [it's likely] another one wouldn't."
Market sources agreed that most demand from the coatings market is coming from the remodeling of existing homes and some new construction.
Additionally, February acetone contracts increased by 4.5 cents/lb month on month, adding strength to March MMA price initiatives.
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