Chemical Profile: Asia PMMA

08 May 2014 17:23 Source:ICIS Chemical Business

Polymethyl methacrylate (PMMA) is the most important application for methyl methacrylate (MMA). Once cast or moulded it is clear, hard, UV transparent and resistant to gamma rays.

It is an economical alternative to polycarbonate (PC) when extreme strength is not required. PMMA comes mainly in two grades – general purpose (GP) and optical grade.

GP-grade PMMA is a material widely used in many industries and a large number of everyday/household applications, such as souvenirs, illuminated signs and bathtubs. Its automotive applications include car tail lights and speedometer covers.

Optical-grade PMMA is used to make TV screens for large LED (light emitting diode) TVs, light guide panels and computer monitors. It is also found in application screens for smaller electronics items such as mobile phones, MP3, and media players.

Demand has stagnated since 2013 against a backdrop of slowing economic growth in key consumption market China and weak economies in US and Europe, the largest import markets for PMMA-made products.

A shift in consumer preferences from computer monitors to smart phones with smaller screens has also reduced demand for optical-grade PMMA in the electronics sector, which remains the largest sector for PMMA. Technological changes favouring substitute products in TV manufacturing have also curtailed demand growth. Supply has remained ample after a large boost in production capacities from 2009-2010. Producers have reduced operation ratios in a bid to balance supply and demand but despite so, supply has remained long given the large number of producers.

In China, prices have remained stable from the second half of 2013 to March 2014 despite continued rising prices of feedstock MMA from August 2013 onwards. PMMA prices were stagnant at $2,100-2,220/tonne CFR (cost & freight) China during that period while MMA prices rose by $50-70/tonne to $2,050-2,060/tonne CFR SE Asia. In April, producers hiked prices and stood firm for higher prices in view of increasingly squeezed margins, targeting increases of $50-100/tonne. Buyers, on the other hand, were resistant because of the bearish market conditions in China. Subsequently, PMMA prices rose by $20-30/tonne to $2,120-2,250/tonne. Meanwhile, spot prices in southeast Asia fell by $50/tonne from $2,350-2,400/tonne CFR SE Asia to $2,300-2,350/tonne CFR SE Asia.

Chemically, PMMA is the synthetic polymer of MMA. PMMA is routinely produced by emulsion polymerisation, solution polymerisation, suspension polymerisation and bulk polymerisation.

For glazing, some MMA can be pre-polymerised in a continuous stirred tank reactor and the resulting viscous liquid is fed into a series of flat glass plate-like moulds. This type of batch operation is cumbersome, so continuous polymerisation/cast technologies are also in operation. In belt polymerisation processes, the MMA/PMMA syrup is injected between continuous highly polished metal belts. Continuous and batch processes are also possible.

Against the backdrop of slowing growth in China, it will be difficult to see a recovery in prices and demand for PMMA, especially from the key downstream electronics sector, some industry sources said. Majority of the market players are expecting prices to remain stable in the near term.

The momentum for growth is weak and the near-term growth is likely to be stagnated, market sources said. In turn, this has led to concerns that there will be no improvements to the weak market conditions, they added.

Usually, when there are major holidays approaching in China, buying appetite will increase and a spike in demand is obvious. However, such trends are no longer obvious and this has dampened market sentiment in China, a producer said.

In southeast Asia, prices are expected to remain steady given that growth in the automotive sector is likely to be limited, market participants said. The automotive sector is the major user of PMMA in southeast Asia.

Political instability in key markets Thailand and Indonesia have also clouded market clarity and without a clear direction, most market players have chosen to be remain prudent by procuring only for immediate needs, market sources said. This in turn, will most likely suppress growth rates, they added.

By Eric Su