US MMA market faces softening demand on weaker smartphone, TV sales

Source: ICIS News

2019/03/14

HOUSTON (ICIS)--US methyl methacrylate (MMA) demand could face future dampening from downstream polymethyl methacrylate (PMMA) after Apple's revised sales projections and the latest sales figures for flat screen TVs and smartphones.

ICIS Editorial Chart goes here

Around 56% of MMA demand stems from the downstream PMMA market, which is largely used for flat panel TV and smartphone screens.

In January, Apple revised its quarterly sales forecast with CEO Tim Cook blaming depressed iPhone sales in China.

Smartphone shipments to China continue to fall year over year, according to the China Academy of Information and Communications Technology.

While February tends to be the weakest month of the year in terms of demand because of the Chinese Lunar New Year, this year’s demand figures were the lowest seen in six years.

“Every smart phone and big screen TV that aren’t selling, that much less MMA is going out into the marketplace,” a market source said.

New model releases for smartphones have also been down, indicating a weakening consumer desire for the latest technology.

This trend is likely to continue, as evidenced by Apple’s latest revision.

The US is a net exporter of MMA, although exports have generally been declining for the past year, as seen in the following graph.

MMA market participants describe the market as balanced, with no supply or demand issues. However, the recent unplanned shutdown at Lucite's facility in Beaumont, TX may add additional supply pressure to the market.

The decline in PMMA demand for MMA in Asia could be made up for in other areas, such as in the resins and polymers sector. The construction market can also significantly impact on the health of the MMA market.

US March acetone contracts are facing downward pressure from falling propylene values and remain under discussion.

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

Focus article by Alex Snodgrass