03 May 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European polymethyl methacrylate (PMMA) second-quarter contracts have risen by €0.05/kg ($0.06/kg) at the low end from the previous quarter on cost recovery, sources said on Friday.
Contracts for standard grade material into the extruded sheet sector settled at €2.05-2.30/kg FD (free delivered) NWE (northwest Europe).
There were also rollovers on contracts, depending on the starting point, and market prices range from €1.95-2.30/kg FD, with the majority settling in the published range.
One consumer said: “I think demand is still somewhat weak. There is demand, but not to a satisfying level. The cost of making PMMA is eating the margins of producers.”
Demand remains weak. Prices had been on a downtrend since the second quarter of 2012, as poor macroeconomic conditions have hampered consumer confidence and increased market competitiveness.
“Increases are going through,” a producer said. “There are also increases on the sheet business. There has been such a squeeze with the high cost of producing monomer and the low prices in the market. We need to recover the lost margin.”
Another producer said it had achieved average increased of around €40/tonne. Hikes of up to €100/tonne were agreed in the second quarter.
A sheets producer said: “It is a stable situation. But it's not a very strong one. But how is the market developing? It doesn’t look very bad. It is okay, not wonderful. There is no problem with supply. Higher MMA [prices] should support our price increases.”
Upstream, second-quarter methyl methacrylate (MMA) contracts settled with the first quarterly contract price increase the MMA sector has seen since the second quarter last year, on margin recovery. The low end of the MMA price range is €100/tonne lower than prices were at the same time last year.
“It’s still steady at a very weak level,” a PMMA trader said. “I heard about increases but I haven't seen anything like that. The prices are the same as in the first quarter and there is plenty of material around at €1.90-2.10/kg FD NWE.” Attractively priced imports from Asia continue to put downward pressure on the market.
Looking ahead to the third quarter, most PMMA sources said it is too early to speculate on likely prices. The first producer said: “I have absolutely no idea what will happen in Q3. I think it will be driven by cost.”
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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