SINGAPORE (ICIS)--China’s methyl methacrylate (MMA) supply is likely to tighten in March as producers will build up inventory for contract customers ahead of the scheduled turnarounds at domestic and overseas plants.
The expected tightening of supply would provide support to MMA prices after the Lunar New Year holiday, which is on 15-21 February.
On 12 February, spot prices were assessed at Chinese yuan (CNY) 18,500-18,800/tonne ($2,923-2,970/tonne) in east China and at CNY20,500-21,000 in south China, according to ICIS data.
All the MMA plants in China are expected to run normally during the week-long Lunar New Year holiday from mid-February.
But in April and May, three plants with a combined capacity of 365,000 tonnes/year – which accounts for 42.7% of China’s overall MMA capacity – are due to shut for maintenance.
Huizhou MMA’s 90,000 tonne/year unit in Guangdong province will have a two-month shutdown from the first half of April, while Hongxu Chemical’s 75,000 tonne/year unit in Shandong province is due for a seven-day turnaround in the same month.
These two producers may reduce supplies to the spot market after the February holiday and focus on building up stocks to meet contractual requirements during the shutdown.
In May, Jilin Chemical is expected to shut its 200,000 tonne/year MMA unit for about 45 days of maintenance.
Meanwhile, supply in China will also be affected by the planned major overhaul at Lucite International’s 200,000 tonne/year MMA plant in the UK for two months in March.
Output from the company’s Chinese plants may be diverted to other regions, thus limiting spot availability in the domestic market.
In addition, there may be no spot supply from the Middle East after the week-long holiday in China in February, with the earliest cargoes expected to arrive in the country in late March or early April.
A new 250,000 tonne/year MMA plant in Saudi Arabia operated by Saudi Methacrylates (SAMAC) is currently beefing up production, but shipments to China is unlikely before April , according to a company source.
On the demand side, downstream requirements in China are expected to increase in March.
MMA end-user Shandong Rike Chemical is expected to resume operation in mid-March, with its consumption pegged at around 4,000 tonnes in 2017.
Meanwhile, downstream users are set to be increasingly reliant on MMA instead of recycled products amid China’s waste plastics import ban, which was implemented on 1 January 2018. This could translate to around 6,000 tonnes/month of MMA requirements, according to ICIS’ estimates.
An expansion at a downstream polymethyl methacrylate acrylic plastics (PMMA) capacity of Suzhou Double Elephant Optical Materials to 80,000 tonne/year in March would also increase demand for feedstock MMA.
Focus article by Yiting Tang
Picture: Flourescent acrylic sheet. Methyl methacrylate (MMA) is used in the manufacture of acrylic sheet, surface coatings, emulsion polymers and adhesives.
($1 = CNY6.30)