MMA prices slip despite technical woes
Asian methyl methacrylate (MMA) prices softened this week. Recent plant issues surrounding a northeast Asia maker failed to support Asian market sentiment or prices. Prices have declined as market sentiment is weak in southeast Asia because of the Muslim fasting month of Ramadan which is a traditionally lull period, market sources said.
Asian spot prices of most petrochemical products fell by Friday, in line with declining crude futures. Market players are increasingly concerned about the possibility of another global economic recession that will weaken demand for commodities.
Despite this, some sporadic producers are of the view that MMA prices will defy the downtrend. According to them, supply is tightening because of multiple ongoing and impending plant turnarounds, and rising feedstock prices and lean inventories will justify a lift to their prices. Japanese producers were also in favour of not reducing their offers in the months ahead, because of current unfavourable exchange rates for the major US currency.
However, a lack of optimism over the recovery of demand in the optical grade polymethyl methacrylate (PMMA) market was evident, even among PMMA makers.
Many market players are also concerned that the start-up of a 70,000 tonne/year plant in the next two months will lead to a supply surplus and accelerate the pace of the price downtrend.
Spot
Bulk cargoes of more than 500 tonnes were assessed as lower by $20-30/tonne lower this week at $2,400-2,470/tonne CFR SE Asia, on the back of softer demand despite plant outages.
August offers were nominated at a roll over from July, but softer market fundamentals gave way to lower price settlements. Buying ideas were hovering close to $2,400/tonne CFR SE Asia.
Selling ideas were no longer ‘workable’ at $2,500/tonne CFR SE Asia, and the high end of the range was thus assessed as $30/tonne lower at $2,470/tonne CFR SE Asia.
Workable levels in Taiwan and Korea on a CFR basis are also lower by $20-30/tonne at $2,400-2,450/tonne CFR Taiwan/CFR Korea, in line with the softer numbers heard in the southeast Asian market.
Prices of iso-tank cargoes of up to 500 tonnes have slipped by $30/tonne to $2,520-2,650/tonne CFR SE Asia, reflecting lower deals and discussion levels.
The highest offer in the market was heard at $2,700/tonne CFR SE Asia, but no deals were located at this level this week.
Deals were heard as low as $2,520-2,530/tonne CFR SE Asia although deals at higher levels at up to $2,650/tonne CFR SE Asia were also heard done.
Exports from a Taiwan-based producer were halted due to a recent outage at its upstream units. No offers were located.
Chinese domestic prices continued to remain sluggish this week with limited support despite the shutdown of a major China-based plant for maintenance.
Prices softened by yuan (CNY) 200/tonne on the low end of the range by Friday’s close to CNY18,400-19,300/tonne EXWH in eastern China. Prices below this range were also heard in the market.
Prices in southern China were unchanged for the week at CNY19,000-19,700/tonne DEL. Some lower prices below CNY18,700/tonne DEL were heard in the market as well.
Exports to Turkey or Egypt could still fetch around $2,750-2,800/tonne, a producer said.
Downstream
Asian general purpose (GP) PMMA spot prices were assessed as $50/tonne lower on the low end of the range at $3,100-3,200/tonne CFR SE Asia and were unchanged at $2,900-3,100/tonne CFR China on 4 August.
Production News
Taiwan’s Formosa Petrochemical Corp (FPCC) has halted all exports from its 98,000 tonne/year MMA unit at Mailiao after reducing operating rates at the plant, a company source said.
Operating rates were cut at the acetone cyanohydrin-based plant following the latest fire at the Formosa group’s Mailiao petrochemical complex on 30 July. The exact operating rates of the plant are unknown, said the source.
The Taiwanese government has asked Formosa to shut down all the units at the Mailiao complex in stages over a one-year period for inspection and safety checks.
The MMA unit has been scheduled for safety checks, but no shutdown details are available.
FPCC is still monitoring the situation, according to the source.
The suspension of exports is expected to have a limited effect on the market, as the plant exports only minimal quantities, most market players said.
Meanwhile, the company will supply quantities to its domestic customers on an allocation basis, he added.
The reduction in supply will have little effect on the downstream polymethyl methacrylate (PMMA) segment, as demand for the product remains weak, market players said.
Lucite International (China), a subsidiary of Mitsubishi Rayon, shut its 93,000 tonne/year MMA plant at Shanghai Chemical Industrial Park in Caojing early this week, a company source said.
The company shut the plant on 2 August and is expected to restart it at the end of the month after a 28-day turnaround, the source added.
Lucite postponed the shutdown to co-ordinate its production with its raw material suppliers, the source said.
Japan’s Mitsubishi Rayon Co (MRC) is currently running its 55,000 tonne/year butane-based MMA line in Otake at 100% after the unit was restarted on 28 July, said a company source.
The MMA line at Hiroshima prefecture was taken off line on 19 July for a scheduled turnaround, the source said.
MRC's other crude butane-based 55,000 tonne/year MMA line at Otake had its turnaround on 12 May to 7 June, the source said.
The company also operates a 107,000 tonne/year acetone cyanohydrin-based MMA line at the site that is not due for maintenance this year.
($1 = CNY6.44)
This week on ICIS news ( www.icis.com):
04-Aug-11 11:29 Japan’s Mitsubishi Rayon runs Otake MMA line at full capacity
04-Aug-11 09:45 Mideast, India solvent prices rise on firmer feedstock costs
04-Aug-11 09:20 Lucite China shuts Caojing MMA unit on 2 August
04-Aug-11 09:09 Taiwan's FPCC cuts operating rates at MMA unit, stops exports
03-Aug-11 17:26 Europe August acetone MMA contract down €14/tonne
