LONDON (ICIS)--Two European polymethyl methacrylate (PMMA) producers on Friday announced their intention to increase prices because of higher costs.
Negotiations are expected to get fully under way next week.
Lucite International is pursuing price increases of €160/tonne for its PMMA resins business and of €180/tonne on all PMMA sheet products, effective on 1 May, a source from the company said.
Another producer is targeting double-digit price increases of around €80/tonne in its second-quarter contracts.
“Based on raw material price increases, we are forced to try to pass increases during the second quarter,” the second producer said.
Overall demand is showing only a slight improvement compared with the first quarter of last year, and that is being seen mostly from the end-use automotive sector, a source said.
It said Q1 demand had risen by around 2-3% year on year, amid a marginally improved economy and optimistic sentiment.
A buyer said: “My demand is not better but car sales in Germany are slightly up. Do you see a big move up? No. But we are 1.2-1.5% better than last year for the Q1 - it's not a revolution but it is something.”
The buyer said its forecast for the second quarter and remainder of 2014 is better than last year, and attributed its outlook to improved activity in the downstream construction sector.
Warmer weather than was seen in Q1 2013 has helped. “This year it [construction] started in February, normally it doesn’t start until March.”
Producers remain keen to improve margins that have been eroded.
“The internal cost pressure is tremendous,” the buyer added.
The market is balanced to long, depending on source.
In the upstream methyl methacrylate (MMA) market, two producers are aiming for triple-digit price hikes for second-quarter contracts on tightening supply, improving demand and to recover costs.
Follow Helena Strathearn on Twitter