Methyl methacrylate (MMA) is a liquid monomer used primarily to produce resins and acrylic polymers, bringing properties such as durability, stability and UV-resistance to products such as point-of-sale displays for cosmetics and other products, baths and spas, dental prosthetics, automotive and other lighting fixtures, flat-screen monitors as well as industrial coatings on roads and heavy equipment, for example, and to acrylic architectural paints and adhesives. A large percentage of MMA goes into PMMA – polymethyl methacrylate, which can be cast or extruded. PMMA is transparent thermoplastic, often used as a lighter, shatter-resistant alternative to glass.
MMA demand in the US is driven largely by coatings (architectural and industrial) and adhesives and sealants applications. MMA also is used in water-based acrylic dispersions for exterior masonry and wood coatings and semi-gloss emulsions for interior decorative coatings, so the construction markets – especially residential and commercial – significantly affect the health of the market.
Currently, supply is said to be tightening, which sources attributed to a combination of nearly concurrent spring maintenance outages and continued incremental improvement in downstream demand. Additional volumes have been requested, but supply is not yet problematic. One market player warned, however, that it probably will get to that point.
One reason there is heightened potential for a supply crunch is because of Dow Chemical’s indefinite sales control on its merchant volume. With mostly captive capacity, the producer is not a major merchant-market player, but the confluence of spring turnarounds is a likely market stressor.
One seller insists that supply is tightening and therefore intensifying market conditions. Another producer said its supply is fine, but concedes that the broader market is likely more snug. Although there are still negative-to-mixed economic indicators, market participants are mostly optimistic about demand.
Most PMMA demand emanates from Asia, due to TV manufacturing there and the use of PMMA in flat-panel TV screens.
May pricing was not yet settled, as buyer sentiment about proposed increases of 5-7 cents/lb ($110-154/tonne) remained fairly evenly split.
Some buyers asserted that little or none of the price increases would or should succeed, while others believed price efforts would mostly or fully realized, given current maintenance turns and additional volume requests.
A consensus seemed to be forming below the targeted range, with settlements variously heard flat or up by 1-3 cents/lb. Although several market players said May pricing would not be certain until late in the month, the range was likely to be assessed up by an average of 2 cents/lb.
Dow, which proposed the most aggressive May increase at plus 7 cents/lb, had also implemented indefinite sales control on its merchant volume, although most of its production is captive.
MMA truck and rail contract values previously settled flat for April on market conditions stabilized by steady demand ahead of the spring maintenance outages.
The rollovers held MMA railcar values, for example, in a range of $1.29-1.33/lb. Truck and rail values also rolled over in March after an average February increase of 3.50 cents/lb, which was below targeted increases.
Feedstock May barge acetone was fully settled late in the month at 66.25 cents/lb, down by 1 cent/lb from April.
MMA was first produced in the mid-1930s by an acetone cyanohydrin (ACH) route still used in many plants today, primarily in North America and Europe, and about 40% in Asia. It is dependent upon sulfuric acid and acetone, the latter of which has become less available with the reduction in co-product phenol demand and production over the past two years.
An alternative method pioneered by Lucite – its Alpha process – uses ethylene rather than acetone, thus lowering variable and capital costs and eliminating the need for a spent acid recovery system because there is no use of sulfuric acid. Another method of MMA production is the I-C-4 Process used in most of Asia and Europe, which involves the direct oxidation of isobutylene. Lastly, Evonik’s Aveneer process is an ACH route that also avoids the use of feedstock sulfuric acid.
The US MMA market generally is expected to track projected US GDP growth of 2-3%, reflecting its close link to the economy. And balanced conditions are expected to prevail for the next couple of years with operating rates hovering in the low 80% range for the remainder of 2014, likely increasing to just above 90% within the next decade. However, US demand from the mature flat-panel display market was down in 2012, which some predicted would continue, despite some talk of single-digit percentage growth in the near term. Potential supply stressors include a potentially strong, albeit delayed spring uptick in coatings buying on pent-up demand, unplanned outages or increased interest from South America in US exports, and the potential for some rationaliation, given older plants in Asia and Europe.