Europe spot MMA at 26-month high amid summer slowdown

Focus article by Helena Strathearn

LONDON (ICIS)–Spot methyl methacrylate (MMA) prices in Europe are at a 26-month high, amid the traditionally slower summer period, because of limited availability and slightly improved demand levels versus those seen at the same time last year.

Spot prices so far this week are trading at €1,780-1,830/tonne FD (free delivered) NWE (northwest Europe), but there is talk in the industry that September-loading cargo prices could firm on tighter supply and higher demand.

Average prices have not reached this level since early June 2012 when spot was at around €1,810/tonne FD NWE.

The market began the year well supplied, with some buyers describing the market as long. But the balance shifted promptly in April after force majeure was declared at Lucite International’s 200,000 tonne/year MMA facility in Billingham, in the UK.

This was lifted in the middle of May and replaced by a strict sales control that is expected to remain in place until its upcoming maintenance turnaround is completed.

A number of global outages – planned and unplanned – in recent months, and yet to start, have contributed to the supply restrictions.

Arkema is understood to have now begun its scheduled annual three-week maintenance at its 90,000 tonne/year facility in Rho, Italy.

Lucite International will undergo maintenance at its Billingham site that is set to run through October.

Demand from the coatings sector is higher than it was in the third quarter of 2013, which is adding to supply strains. MMA availability is expected to remain tight for the rest of the third quarter, and the constraints could carry on until November or December, some sources have said.

Market activity is slightly subdued in August because of holidays, but demand is likely to rebound in September.

Supply constraints and steady-to-firm demand pushed third-quarter contract prices up by €60/tonne.

MMA is used in the manufacture of acrylic sheet, surface coatings, emulsion polymers and adhesives.

Follow Helena on Twitter