LONDON (ICIS)--European methyl methacrylate (MMA) second-quarter and April contract discussions continue, with triple-digit increases agreed so far for both, sources said on Friday.
There has been a wide range of settlements heard for both contracts, with negotiations entering the latter stages.
There is a gap between the monthly and the quarterly contracts, with players seeing the monthly contracts priced higher than quarterly. ICIS contracts prices are gross prices and do not include any discounts or rebates.
The driver of the upward pressure continues to be the supply and demand dynamics, with raw material price movements currently playing a lesser role.
There remains sentiment on the buying side that sellers are capitalising on the current shortness in the market, to increase margins ahead of the new capacity coming onstream later in the year.
Supply remains short, with sales controls still in place for both Lucite International and Evonik.
There were no fresh production problems heard in the market this week, with production running well for European producers.
Demand from the coatings sector is increasing, which is traditional for the time of year. Some coatings buyers this week said obtaining volumes to meet the increasing demand is an ongoing struggle. There remains concerns over this for May, with the shortness in supply here to stay for the next few months at least.
Players continue the countdown to June, when new capacity is scheduled to come onstream in the Middle East.
The joint venture between Mitsubishi Rayon (MCR) and SABIC, Saudi Methacrylates Company (SAMAC), with its 250,000 tonne/year Alpha 2 plant is scheduled to start in June this year in Saudi Arabia.
One buyer this week said they have been approached by an Asian distributor that is looking to sell the product from June/July onwards.
The recent increase in imports has made some buyers more hopeful over the supply level in May. However, imports remain at a low level, with limited volumes seen from Brazil and Asia.
Because of the supply constraints there continues to be talk of producers outside of the region buying volumes for captive use.
March contract prices settled at an increase of €200/tonne, bringing the range to €2,100-2,195/tonne FD (free delivered) NWE (northwest Europe).
Nearly all MMA is polymerised to make homopolymers and copolymers, the largest application being the casting, moulding or extrusion of polymethyl methacrylate (PMMA) or modified polymers.