26 April 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European second-quarter methyl methacrylate (MMA) contract prices rose by €90-100/tonne ($117-130/tonne), largely on margin recovery, sources said on Friday.
This is the first quarterly contract price increase the MMA sector has seen since the second quarter last year.
Hikes of €120-145/tonne over first-quarter contract prices had been targeted by producers because of higher raw material costs, improving demand, tighter supply and to restore margins that had been squeezed to near-historical lows.
Buyers sought to lessen the severity of the targeted increases, particularly as downstream demand has failed to pick up as it usually does during spring, and as supply is balanced.
A weak economic environment, coupled with colder-than-usual weather has negatively impacted demand. Offtake from the coatings and polymethyl methacrylate (PMMA) sectors typically peaks in the second quarter, but buyers and sellers agree this is yet to be seen. Nevertheless, demand has improved somewhat and is expected to remain stable-to-firm through the quarter.
The feedstock acetone contract price has risen by €30/tonne since the beginning of the year, but a decrease is widely expected in the May contract price, following the €80/tonne fall in the propylene contract price this month. Second-quarter methanol contracts rose by €20/tonne.
“Yes, without a doubt prices moved up,” one buyer said. “Although, they [producers] are going to get nice feedstock relief from the propylene. It's not as tight as people had initially thought.”
Another buyer said: “I still think what they got is too high. I think this is the last price increase for the year. Demand is improving slightly and very slowly for coatings.”
“I really don't know what the reasons for the increases are. The producers want to increase their margins,” a third buyer said.
A producer said: “Increases are varied, but the final pricing level is quite tight.”
Contract prices for the second quarter are at €1,750-1790/tonne FD (free delivered) NWE (northwest Europe), €100/tonne below Q2 2012 prices.
“Our margins are being decimated,” one MMA supplier said in March.
Spot MMA prices have risen this week, in line with pricing in other regions, sources said, despite average demand. “Demand has been regular, but no fireworks,” one trader said.
The spot range is at €1,650-1,720/tonne FD NWE.
($1 = €0.77)
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