Asia’s reopening supports demand for protective products raw materials

SINGAPORE (ICIS)–Asian demand for chemical raw materials that go into protective barriers used to prevent coronavirus transmissions is expected to remain buoyant as more economies in the region reopen.

The uptick in demand for polymethyl methacrylate (PMMA) into acrylic sheets for transparent barriers is increasing in Asia as economies slowly reopen, with indications that this will continue for some time amid the ongoing pandemic.

Sheet makers are now seeing increased demand from within southeast Asia including Singapore, Thailand and Indonesia, as lockdown restrictions are being lifted.

Thailand started the last stage of its lockdown on 1 June with the aim to fully re-open its economy on 1 July, while Indonesia’s “large-scale social curbs” ended on 4 June.

Singapore will also enter the next phase of its economic reopening from 19 June.

In the week ended 4 June, PMMA prices were assessed at an average of $1,500/tonne CFR (cost & freight) China, up by $35/tonne from the previous week, according to ICIS data.

Key feedstock acetone CFR CMP (China Main Ports) prices have risen by more than twofold since early April to an average of $1,050/tonne in the week ended 12 June.

China domestic MMA prices have surged by 83% since early April to CNY 13,000/tonne extank east China in the week ended 12 June.

Transparent sheets are now being installed in shops, restaurants, offices, hospitals and other public spaces to prevent coronavirus transmissions.

Cast acrylic sheet, made directly from the monomer, and also extruded acrylic sheet, made from PMMA resins, are commonly used to make these barriers.

According to an Asia-based PMMA producer, demand for protective sheets is still firm in US, Europe and Middle East.

The producer, who sells PMMA resins to extrusion sheet makers in the these regions, said that it is receiving spot enquiries and expects demand to remain supportive for the rest of the year.

However, demand for protective barriers alone is insufficient to lift overall demand for MMA as other downstream sectors remain weak, with major industries such as automotive and construction still heavily impacted by disruptions caused by the coronavirus.

This may result in weaker overall demand growth for these products in the months ahead compared with the sharp shikes seen so far this year.

Global exports of MMA to-date this year now stands at 343,638 tonnes, according to ICIS data.

Global shipments totalled 1.31m tonnes for the whole of 2019.

Global exports of PMMA meanwhile are at 155,901 tonnes while global shipments of PMMA totalled 576,357 tonnes last year.

Global PMMA Exports

Source: ICIS

DEMAND FOR PERSONAL PROTECTIVE EQUIPMENT SUPPORTING PP
With the coronavirus pandemic, growing demand for face masks, disposable syringes, and other medical protective equipment is expected to boost the supply of transparent polypropylene (TPP) grade and polypropylene (PP) fibre grade, according to US based analysis firm Beroe.

Demand for PP from the medical sector in China remains supportive, especially for the production of face masks, according to ICIS senior analyst Joey Zhou.

Masks are made of two fibrous layers which use PP fibre as the raw material, and a melt blown fabric layer for antivirus protection which needs to use high melting index PP (melting 1500).

“China is the largest producer for face masks and both domestic and export demand remains strong,” Zhou said.

The production of face masks remain the key drive for fibre-grade PP in the short term.

However, demand has since waned since its peak in April when face masks were in shorter supply and will not be able to push PP prices much higher, she said.

There are also government-led moves to tighten regulations on illegal factories producing face masks.

Furthermore, the higher production of face masks has lowered their prices back to normal levels, according to Zhou.

In longer term, demand for fibre-grade PP can support overall demand but will not be the key driver. Demand from medical section takes over less than 5% of China’s total PP demand, according to Zhou.

With additional reporting by Li Li Chng and Leanne Tan

Focus article by Nurluqman Suratman