Europe MMA market gears up for EPCA discussions

04 October 2013 14:39  [Source: ICIS news]

LONDON (ICIS)--Views regarding availability in the European methyl methacrylate (MMA) market are mixed, with some sellers indicating restrictions in supply, while buyers point out that the market is at least balanced-to-long, sources said on Friday.

Speaking ahead of the 47th annual European Petrochemical Association (EPCA) meeting, one producer described the market as "balanced-to-snug". “It’s absolutely not long. It’s wrong to call it tight,” it explained.

Contract negotiations for October and the fourth quarter are likely to be focused on raw material costs and margin erosion, as well as supply/demand fundamentals.

Ongoing plant shutdowns and reduced run rates in Asia have reduced supply there, and while this is having some impact on import volumes, European buyers said they are still receiving attractively-priced offers from south Korea.

Demand in Asia is steady at a low level, with margins squeezed because of feedstock cost pressures.

A buyer based in Europe said: “The market is long, period. In a market that is long, it is a buyers’ market. The producers will certainly try to get a price increase based on raw material prices. I'm not going to pay them a dime more! The market is so difficult, it will be a rollover until the end of the year.”

The euro/dollar exchange rate is working in favour of European buyers, sources said, adding that material from Brazil is limited, but is being offered.

Another buyer said: “I’m not sure we can have increases based on tightness. Demand is stable. They [producers] are hinting for an increase...well I'm doubtful…I don't think the market is really tight. They want to increase their margins.”

“It will be difficult to get a price decrease,” a third buyer in Europe said. “But they [the producers] will have difficulty to get increases. One of the scenarios acceptable for buyers is a rollover. There is no problem to get material.”

The October feedstock acetone contract price dropped, following increases in August and September because of higher propylene costs. The fourth quarter methanol contract price rose by €18/tonne ($25/tonne) to €408/tonne FOB (free on board) Rdam (Rotterdam).

The producer said: "Prices are increasing. That's a fact."

October Europe MMA demand is steady.

Downstream, there are a few parcels being offered in the polymethyl methacrylate (PMMA) market at prices lower than those in the monomer sector.

One PMMA source, however, said these prices are not sustainable, nor do they set the trend for the market. The sporadic offers being made are in the €1,500s/tonne FD (free delivered) NWE (northwest Europe), and understood to be of European and Asian origin.

Follow Helena Strathearn on Twitter

($1 = €0.73)

By: Helena Strathearn
+44 208 652 3214

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