Price and market trends: Asia methyl methacrylate rises on cost pressure

27 September 2013 10:20  [Source: ICB]

Spot methyl methacrylate (MMA) prices in Asia increased for a second consecutive week, largely driven up by cost pressures, but further gains likely to be capped by weak demand from downstream polymethyl methacrylate (PMMA) sector, market sources said on 17 September.

On 13 September, MMA prices were assessed at $2,000-2,020/tonne (€1,500-1,515/tonne) CFR (cost and freight) SE (southeast) Asia for bulk procurements above 500 tonnes, up by $20/tonne from two weeks ago and the first time since June where the low-end of the price range stood at above $2,000/tonne CFR SE Asia, according to ICIS data.

Producers sought to relieve cost pressures stemming from recent spikes in crude oil prices by raising offers by almost $50/tonne from July, market sources said. Recent gains in MMA prices were also supported by tightened supply amid plant shutdowns and reduced MMA production in Asia, they said.

SHUTDOWNS EXPECTED

Supply is expected to tighten further through October as a number of MMA facilities are due for maintenance, a producer said.

Huizhou MMA’s 90,000 tonne/year plant in Guangdoing has been shut since end-August, with the restart set by the end of the month, while Lucite International’s 100,000 tonne/year MMA plant in Shanghai is due for turnaround in the second half of September.

In Singapore, Lucite International’s 130,000 tonne/year MMA plant was taken off line on 10 September for a three-week maintenance, according to company sources. Meanwhile, rising cost pressure and weak demand for the last two to three months are forcing other producers to lower their output, market sources said.

WEAK DEMAND CONTINUES

Offsetting the upward pressure, however, is the continued weakness in demand from key downstream PMMA sector.

Demand for PMMA has been weak in the last two months, largely because of stiff competition from substitute products for optical grade PMMA, which is mainly used in flat-screen LED (light-emitting diode) panels in televisions.

Downstream manufacturers prefer lower-cost alternatives to PMMA to maintain their production costs, given the bearish macroeconomic conditions in the eurozone and the slow economic growth in China, according to market sources.

One of the key competitors of PMMA, is polystyrene (PS), which is used to make big screen panels, they said. PS spot prices were assessed at $1,910-1,930/tonne CFR SE Asia for the week ended 13 September, according to ICIS.

PMMA is currently the largest application of MMA in Asia, accounting for more than 40% of Asia’s demand.

Unless the demand of PMMA picks up, MMA will face difficulty sustaining its gains, market sources said. MMA demand from other sectors such as cast sheet manufacturing and emulsion, meanwhile, remains relatively stable.

MMA is primarily used in the production of PMMA, a polymer used in automobile glazing, solar panels and LED lighting. It is also used in paints and coatings together with methacrylic acid.


By: Eric Su
+65 6780 4327



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