Asia MMA demand outlook subdued as coronavirus disrupts supply chain

SINGAPORE (ICIS)–Asia’s methyl methacrylate (MMA) demand may remain subdued as the coronavirus spread continues to disrupt the supply chain.

In the week ended 21 February, MMA prices for bulk parcels of 500 tonnes and above were assessed at $1,500-1,565/tonne CFR (cost & freight) SE (southeast) Asia, down by an average of $2.50/tonne from the previous week, according to ICIS data.

Supply looks to exceed demand amid a challenging business landscape.

China’s imports of MMA are hampered as downstream plants in the country were operating at low rates, resulting in more volumes available in Asia.

Key downstream polymethyl methacrylate (PMMA) sellers faced similar challenges selling into China, weighing down on southeast Asian PMMA spot prices.

Some discussions for March loading cargoes have started with offers largely rolled over from the previous month.

However, spot buyers either held ample inventory, or were fully covered by their contract volume, curtailing buying interests.

A major buyer in northeast Asia has either cut or stopped operations at its PMMA, transparent acrylonitrile-butadiene-styrene (ABS) and MS plants, market sources said.

Some contract volumes for MMA were reduced as buyers cut back production.

Ongoing and upcoming plant turnarounds, including one in the Middle East, may partially offset the ample supply in Asia.

Taiwan’s Formosa Plastics Corp’s MMA plant is shut from early February-early March; Saudi Arabia’s Petro Rabigh will shut its plant in end-February for around 45-60 days; while South Korea’s LG MMA will shut its No 2 plant for three weeks in April.

In the week ended 21 February, MMA plant operating rates in China averaged at 38.6%, down from 42% in the previous week, as producers attempt to prevent inventory from building up.

Focus article by Li Li Chng

Photo: A man walks past a shop which is going to close down in Tsim Sha Tsui in Hong Kong amid the coronavirus outbreak. (By Kevin On Man Lee/Penta Press/Shutterstock)

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