Europe Q2 PMMA contracts rise €0.03/kg on higher feedstock

16 May 2014 23:59 Source:ICIS News

LONDON (ICIS)--Second-quarter European polymethyl methacrylate (PMMA) contract prices have increased by €0.03/kg from the first quarter because of higher feedstock costs, sources said on Friday.

Contracts for standard grade material into the extruded sheet sector are at €2.03-2.10/kg FD (free delivered) NWE (northwest Europe).

Producers were prompted to target increases because of ongoing pressure on PMMA production margins on the back of high feedstock methyl methacrylate (MMA) costs, amid lacklustre demand.

“Global demand compared to last year is flat,” one producer said. “There has been almost no increase in overall demand. The automotive industry is possibly the only one that has performed well with an increase of a few percent – maybe 6% - on the production of cars.”

Imports from Asia, along with lower-than-usual second-quarter demand, put downward pressure on price negotiations.

However, sources said higher increases went through for the sheet extrusion sector, with one source saying that the resins sector has generally been more affected by Asian imports.

Asian material has been entering Europe as buying interest in Asia has been poor.

One buyer said: “Prices nudged up, maybe not as big as had been asked for. Hopefully we will continue to see a greater difference in margins of granules to sheets. Demand is still so-so.”

It added that low priced polycarbonate (PC) was impacting PMMA prices as well. “I think the fact we have polycarbonate coming from a low base is distorting sales in PMMA. It’s a difficult market.”

Another producer said: “The price increases are absolutely based on cost and a need to try and return some margin into the business.”

Upstream, Europe MMA second-quarter contract prices have increased by €60/tonne.

PMMA is an acrylic polymer that has high ultraviolet (UV) resistance and is available as resin or sheet. About two-thirds of consumption is in sheets produced by extrusion or casting, while the remainder is moulded into various shapes.

PMMA's primary use is in car headlamps and tail lights. The second largest use is in construction (pool and sanitary ware, architectural fittings), and glazing and signage.

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By Helena Strathearn