Europe MMA spot prices stable at low level in soft market

07 February 2014 18:02 Source:ICIS News

LONDON (ICIS)--European methyl methacrylate (MMA) spot prices are stable at a low level, on soft market conditions, although some sellers expect prices to firm in the second half of the month, sources said on Friday.

Buyers and sellers said there is ongoing pressure to keep prices at €1,600-1,620/tonne FD (free delivered) NWE (northwest Europe), but a couple of sellers said the only direction now for spot pricing is up.

Global MMA supply might tighten on the back of upcoming turnarounds in Europe and in Asia; feedstock acetone spot prices are firm; production margins remain squeezed because of higher raw material prices in recent months; and US prices have moved up.

“Prices are under pressure,” a trader said. “But acetone is drastically increasing, so not sure how long this pressure will last. If spot acetone is increasing, the [acetone] contract in March will probably go up. And MMA prices will probably go up. The February spot price will move higher. March demand will be a little bit better.”

It has been a slow start to the year, and it remains to be seen how Asian demand will evolve once players return from the Lunar New Year celebrations, but it is likely that demand will improve as the peak coatings season draws nearer.

A second trader said its prices are still slightly lower than January. “The market is slow for all products. It is slower than normal and compared to other years. Normally prices move up at the beginning of the year compared to December, now it is a rollover, to even slightly down.”

The market usually sees a rise in consumption levels from March, although the strength of demand often depends on weather conditions, as a large portion of MMA goes into the end-use construction sector.

A third seller said it did not think prices would be stable for too much longer. “There is a bit of pressure, a bit of a stalemate. But the next direction will be up in the month.”

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By Helena Strathearn