Asia MMA markets likely to have stable to soft trend

SINGAPORE (ICIS)–Asia spot methyl methacrylate (MMA) trading is quiet with market players expecting a stable to soft trend to continue from previous week amid sluggish demand and weak Chinese market, industry sources said on Monday.

Against a backdrop of China’s economic downturn and recent declines in crude oil prices, market sentiment leaned towards a bearish undertone, they said.

Spot trading as a whole is expected to taper off as parts of Southeast Asia enter the Lunar New Year holiday, which begins in early February.

While there were regional MMA sellers less resistant towards lowering asking levels, limited buying interest was detected on the import front.

Any potential incremental demand in Southeast Asia is unlikely to significantly drive up prices in the coming days, and to some extent, hinges on Chinese domestic prices stabilising, market players said.

Dismal downstream polymethyl methacrylate (PMMA) import demand, notably in China also weighed on the market as a whole.

“Crude oil prices [at historical lows] is not helping,” a southeast Asia-based market source said.

PMMA buyers are mostly keeping inventories minimal before the Lunar New Year festivities in China, refraining from taking import positions.

“There is enough [stock] in the market … buying sentiment is just not there,” the source added.

In domestic markets, Chinese MMA prices in east China ended at yuan (CNY) 9,300-9,400/tonne ex-tank basis on 22 January, marginally down compared with the previous week’s CNY 9,300-9,500/tonne range, and weaker than month-earlier levels at CNY 9,600-9,800/tonne, according to ICIS data.

The near term outlook was clouded by expectations of expanded MMA capacity poised to free up domestic production.

China’s Jiangsu Sailboat Petrochemical Co Ltd’s new 100,000 tonnes/year MMA plant in Jiangsu province is expected to start trial runs from end January, according to industry sources.

Last week a dearth of fresh trades were detected for spot cargoes of 20-300 tonnes on a CFR (cost & freight) Southeast Asia basis, with spot MMA markets expected to potentially take its cue from Chinese domestic markets in terms of price direction.

A combination of sluggish MMA import demand used in cast sheet applications and soft Chinese domestic prices did little to lift market sentiment, according to market sources.

As of 22 January, spot prices of MMA in 20-300 tonnes cargoes averaged at $1,330/tonne CFR Southeast Asia, down by $10/tonne against the previous week, ICIS data showed.

Compared to levels this time a year ago, average spot prices have eased by about 5% at $1,405/tonne CFR Southeast Asia, according to ICIS data.

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

Focus article by Melanie Wee