OUTLOOK ’19: US MMA supply to remain tight, demand strong

HOUSTON (ICIS)–Participants in the US methyl methacrylate (MMA) market are likely to face many of the same dynamics in 2019 that have dominated the industry since 2017 – tight supply and strong demand.

US prices soared to all-time highs in 2018, supported by increased demand from the plastics and coatings sectors.

While demand has held steady from the plastics sector, producers have seen rising demand from coatings, as many paint makers turned to more acrylic formulations.

One producer said it is anticipating continued growth in 2019 in the mid-single-digits percent.

Supply of MMA has been tight for more than a year since Lucite, the largest supplier to the merchant market, operated under force majeure for most of 2017.

Supply is likely to tighten at the end of the first quarter in 2019, as another producer has a planned maintenance scheduled for March.

Evonik, which produces MMA at its 160,000 tonne/year plant in Fortier, Louisiana, rescheduled its turnaround from November 2018 to March 2019.

A distributor said it expects the impact from Evonik’s turnaround to be minimal, even though it will take place just as the peak buying season begins.

“I think they will go into the shutdown with good inventory levels,” the distributor said.

The market will also be watching to see who ends up buying Evonik’s MMA division, with the divestiture planned for the first quarter of 2019.

Lucite is likely to have a turnaround at its 155,000 tonne/year plant in Memphis, Tennessee, in the second half of 2019. The company alternates turnarounds each year between its plants in Memphis and Beaumont, Texas.

Lucite recently completed its turnaround in Beaumont, and producer Dow Chemical completed a planned maintenance at its 475,000 tonne/year plant in Deer Park, Texas.

The Dow plant is the largest in North America, but the majority of its product is used internally and only a small fraction of its production is sold into the merchant market.

Both Lucite and Dow are on sales control and are likely to remain so for the near term.

A producer said it has seen some waning demand because of end-of-year inventory management, but expects customers to begin buying robustly after 1 January, and has already received orders for material.

MMA values could see downward pressure in the first part of 2019 on softer upstream costs.

The spread between US MMA and feedstock acetone improved in November after being relatively flat, as the following graph illustrates. Margins are at new highs for the year, and could improve further on softer feedstock values.

US MMA producers include Arkema, DowDuPont, Evonik and Lucite.

Focus article by Adam Yanelli

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