Europe MMA Jan/Q1 contracts falling on weak global supply, demand fundamentals

Katherine Sale

14-Jan-2019

LONDON (ICIS)–European methyl methacrylate (MMA) January and first-quarter contract talks continue, with decreases expected for both amid a lengthening in global supply and weaker demand dynamics.

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So far, double-digit decreases have been agreed for January contracts, with buyers targeting a triple-digit drop for quarterly business.

The MMA contract for December settled at €2,595-2,640/tonne FD (free delivered) NWE (northwest Europe), a €40/tonne decrease on the lower end and a €90/tonne decrease to the high end.

Fourth-quarter MMA prices concluded at €2,410-2,490/tonne FD NWE, a €75/tonne decrease from the third quarter.

The pressure on spot prices continues and is likely to intensify once orders agreed in December with Asian and Middle Eastern sellers start to arrive.

Demand is in line with expectations for early January. However, the true test will come later in the quarter and will be largely dependent on the extent of an expected uptick as players prepare for the peak demand season.

Sales controls from Evonik have ended following an improvement in Rhine water levels, so there is no restriction to raw material movement.

Despite this, both plants are operating at a lower rate, which sources said may be linked to the abundance of supply in the region.

Spot prices were stable this week; but downward pressure persists with buyers looking to push prices below the €2,000/tonne mark.

The ICIS range remains unchanged pending further confirmation from the market, with many sources deeming prices under €2,000/tonne to be unrealistic for the majority of business.

Prices were assessed at €2,100-2,200/tonne FD NWE.

However, it is widely accepted that prices in February may well be lower, once imports from Asia and the Middle East arrive.

It is unclear if the same intensity of imports will continue going forward, given a string of maintenance stops for Asian sellers in mid-February.

Concerns about the global economy, Brexit and a slowdown in the automotive sector are all dampening general confidence.

Nearly all MMA is polymerised to make homopolymers and copolymers, the largest application being the casting, moulding or extrusion of polymethyl methacrylate (PMMA) or modified polymers.

Focus article by Katherine Sale

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