Chemical Profile: Asia MMA

22 November 2013 10:00 Source:ICIS Chemical Business

Methyl methacrylate (MMA) is polymerised to make homopolymers and copolymers with the largest applications being the casting, moulding or extrusion of polymethyl methacrylate (PMMA) or modified polymers, where many plants in Asia are integrated.

Outages, shutdowns and supply cutbacks in MMA plants of major producers have tightened the availability of cargo in southeast Asia, affecting countries such as Vietnam and the Philippines from September onwards.

In particular, in the key southeast Asian market of Thailand, outages in key producers’ plants in October and November have further shortened the supply to the region.

In Japan, the second largest MMA producing country, inventory levels have fallen close to 20,000 tonnes, according to trade statistics, the lowest since January 2013. According to market sources, an inventory of above 20,000 tonnes “safety mark” is the indication of an oversupply for Japan.

Total production of MMA in Japan is at an average of close to 37,000 tonnes/month from January to September.

Meanwhile, in major MMA market China, export figures have increased back to above 20,000 tonnes/month from July to September after a sharp drop of over 32% to slightly below 15,000 tonnes per month in June, according to trade statistics.

The rise in exports coincided with restocking activities in China, especially for September and October, in particular as demand picked up for buyers from downstream manufacturing and electronics sectors looking to prepare for the year-end festive demand.

However, demand in key downstream sector polymethyl methacrylate (PMMA), which accounts for close to 50% of MMA usage in Asia, remains weak given the unfavourable conditions in the US and the eurozone.

MMA spot prices in Asia have increased by $50-60/tonne for cargoes of more than 500 tonnes since September to November as supply became tighter in the regions amid on-going plant shutdowns and lowered production rates of MMA plants.

In November, spot prices of MMA have firmed, increasing by $20/tonne to $2,040-2,060/tonne CFR (cost & freight) for cargoes of more than 500 tonnes in the week ending 15 November.

In Asia, around one-third of production is via the acetone cyanohydrin process, but the more common route is the C4 method, whereby MMA is produced via the direct oxidation of isobutylene.

Problems with disposing the bisulfate waste, however, have driven producers to find a solution. Germany’s Evonik has developed AVENEER technology, which does not produce sulfuric acid byproduct and is claimed to require less maintenance than older processes. It will use the process in a 150,000-200,000 tonne/year plant planned to start up in 2014.

Japan’s Mitsubishi Rayon Co. (MRC) and UK subsidiary Lucite International have also begun to jointly develop technology to produce biomass-based MMA. They plan to start producing MMA using biomass feedstock by 2016, with the aim to produce 50% of MRC’s MMA output using biomass.

In the longer term, market sentiment on the outlook of MMA remains cautious given the uncertain signs of recovery in the US and eurozone where demand for Asia-made products remains the largest.

Asian demand for MMA, however, is still expected to grow, albeit at a slower rate, mainly supported by growth key economies in the region such as China, Indonesia and Thailand, market sources said.

Expansion plans by MMA producers are likely to add an estimated 200,000 tonnes/year over the next two years in China.

By Eric Su