Price and market trends: Europe PMMA sheets makers face squeezed margins amid low demand

07 February 2014 10:15 Source:ICIS Chemical Business

Low demand and ample competition in Europe and from imports stifles the market for sellers

Polymethyl methacrylate (PMMA) sheet producers in Europe are facing squeezed margins because of low demand in a competitive market, sources said on 28 January.

Extruded sheet is available at €2.35-2.40/kg FD (free delivered) NWE (northwest Europe) or lower, sources said, deeming price levels unsustainable.

One PMMA consumer said: “Sheet producers are not making money on PMMA extrusion sheets. So their margins are into the minus. Everybody is still trying to maintain their own market share, but the low prices can’t continue.”

The consumer added that if something is not done to stop the price erosion, it could have consequences on the market, with fewer players producing. “That means less competition,” the consumer said. “We will continue to review the sheet market and act according to the best needs of the business.”

One sheets producer said: “PMMA sheets producers are not making good margin today due to the low European demand level and tough competition in Europe, plus low-priced imports.”

It said that with prices at the level they are, producers need to pass price rises, adding there are signs of improvement. “The positive point is that the PMMA sheet market [in Europe] seems to be starting to recover from last year.”

The consumer added: “You can purchase polycarbonate (PC) cheaper than PMMA. The bottom line is that someone – the main leaders – need to be prepared to put the price up and stick with it, and maybe someone will follow.”

First-quarter PMMA contract prices are expected to remain largely unchanged from the fourth quarter. Fourth-quarter standard-grade PMMA resin contract prices settled at €2.00-2.10/kg FD NWE.

“There would need to be serious increases in Q2 - maybe €0.10-0.20/kg higher - in order for there to be some profitability for sheets producers,” the PMMA consumer said. “Prices can’t go any lower. They’re at rock bottom.”

PMMA sheets are used in shatter-resistant panels for building windows, skylights, bullet-proof security barriers, signs & displays, sanitary ware, LCD screens, furniture and other applications.

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

By Helena Strathearn