LONDON (ICIS)--Two European methyl methacrylate (MMA) producers are aiming for triple-digit price hikes for second-quarter contracts on tightening supply, improving demand and to recover costs, sources said on Friday.
End-use consumption from the paint, coatings and construction sectors is typically healthier in the second quarter than it is in the first as activity in the coatings and construction industries ramps up during the warmer months as it is the peak manufacturing season.
Lucite International is targeting a €110/tonne price increase in its Q2 contracts because of a global tightening supply and demand balance, and to recover costs, a source from the company said.
The source said the hikes would be effective 1 April and valid for the second quarter.
It added: “Demand is picking up now... and forecasts for April are strong.”
A number of planned and unplanned outages are taking place in Asia, Europe and the US.
“We’re starting to see the impact on the supply side of the planned and unplanned outages,” the source said.
European first-quarter MMA contract prices fell from the fourth quarter of 2013.
“Margins have eroded with stubbornly high raw materials,” it added.
Specialty chemicals producer Evonik Industries will be seeking increases of €120/tonne with effect on 1 April, unless otherwise contractually specified, it said in a press release this week. The producer said: "Due to risen costs during recent months, particularly for raw materials, Evonik Industries sees the need to adjust the prices of methacrylate monomers."
A buyer said demand is better than it was at the same time last year and said there was more optimism in the market this year, but added: “This is not that difficult - last year it was snowing. There are no concerns about supply.”
Another buyer said: “Maybe they [producers] can raise prices once the [coatings] season is in.”
A trader said: “The market is still slow. We are hearing producers talk about an increase for April….which would be welcome but I think (fear) it is a bit of wishful thinking. [Feedstock] methanol going down also will not help.”
Second-quarter contract price negotiations will take place over the coming weeks.
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