FocusEurope September MMA demand outlook steady

10 September 2013 17:40  [Source: ICIS news]

LONDON (ICIS)--Methyl methacrylate (MMA) market participants in Europe expect demand to remain stable during September, after a stronger August than usual, sources said on Tuesday.

August consumption is typically slower as a number of players break for the summer holidays. However, demand for MMA has been boosted by the delayed coatings season, supported by warm weather across much of Europe, and offtake from this sector is expected to run on for a few weeks.

“Demand didn’t dip in August – it was a good month,” a producer said. “August was very strong...September is looking good, and the order books look strong.”

There is talk that the closure of a plant in July has stimulated demand for material in Europe. A buyer, however, said those volumes had largely been supporting the Asian market.

“Demand in August was good, but it may have been driven by supply problems,” another seller said, indicating that it had had additional requests from the market because of the sales control that was in place at major producer Lucite International from 17 June until 31 July.

While buyers see September volumes as steady, most say demand is not booming.

Polymethyl methacrylate (PMMA) [demand] isn't great – the construction market is not great. We have stable demand, but it is not great. We don't see a big pick-up yet. We are still hoping for this, but for the DIY and construction sectors, we expect this year to be flat,” a consumer said.

Although there are some positive indicators in the European economy, players in the sector said there is still unease.

In the south of Europe, a number of companies only returned from summer holidays on 3 September. Players there said it is too early to assess the market, but sentiment is reasonably positive.

“I have the feeling it is a little bit better than July and June,” another buyer said, adding: “But the month of September will not be a beautiful month, with the elections in Germany and the situation in Syria – there are lots of problems on the table.”

With players cautious, inventories remain carefully monitored and forecasts are hazy.

“Nobody wants inventories,” the buyer added. “It’s very complicated. Most people don't even know what will happen for September, never mind October and November.”

A third buyer said it has been offered extra volume, but said it was not able to take any additional material this month.

The first buyer said each week there are mixed signals regarding the economy, and said it is not clear in which direction the economy is going. It spoke about political instability, and the potential impact on crude oil prices, as well as recent feedstock hikes, and said the market is difficult to forecast.

“Europe in August is quiet. Macroeconomic fundamentals have not really improved yet,” the second seller said. It added that September will be a telling month to see if the buying interest will last until October and November.

“Once supply constraints are resolved, will the demand go down? If there is a solution to the political side of things, that brings some confidence. I'm leaning more to an optimistic view for the market for September and October.

Europe is still trying to get out of the perception of recession. There is light at the end of the tunnel, but I am not sure we are quite there yet.”

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By: Helena Strathearn
+44 208 652 3214



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