Editor Julia Meehan, julia.meehan@icis.com

 NOTE: For full details on the criteria ICIS pricing uses in making these price assessments visit www.icispricing.com and click on “methodology”.

In the European polymethyl methacrylate (PMMA) contract market, producers have announced increases on the Q2 level €2.65-2.80/kg FD NWE price on the back of an expected rise in the value of methyl methacrylate and ever increasing energy and production costs.

Consumers however say that slow demand for many applications, particularly those related to the construction sector, would be very hard to pass on to customers.

A major producer said that because of this they were preparing customers for a steep hike in Q4. The producer confirmed this week that it was already informing customers of a €150/tonne price increase effective 1 September. Owing to the seasonal summer slowdown and the time that it takes to prepare the market for a price change, the producer reported that Q3 contract would rollover from Q2.

Another large PMMA supplier voiced a similar pricing sentiment, but said that its €110/tonne price increase would be effective from 1 September, when demand was expected to pickup following the summer shutdown period.

The supplier reiterated that it was intending to move away from quarterly and longer term contracts to monthly. A major producer of propylene had already published its intention to move to monthly pricing from 1 October.

Both selling sources said that it was essential to increase prices, which have fundamentally remained flat, whilst the energy, production, raw materials and transportation costs have hit record levels, not only in Europe, but on a global scale.

Meanwhile in the MMA market, opinions were very mixed this week in relation to supply and demand, as well as spot and quarterly pricing.

With the Q3 propylene contract price still under discussion up until Friday afternoon, buyers said that they were loath to agree anything in relation to price.

On Friday afternoon, the Q3 propylene contract was agreed at €1,015/tonne FD NWE up by €88/tonne.

MMA producers, meanwhile, appeared relentless in their quest to increase contract prices from Q2 to Q3 in order to recover lost margins and manage record high energy and production costs.

Increases of €100/tonne for quarterly MMA contracts were still under discussion, according to a producer. The same selling source said that spot MMA business had been concluded at an increase of €75/tonne to plus €100/tonne. 

Another producer reported achieved increases of €200-250/tonne on the back of a tight supply situation, not only in Europe but on a global basis.

Success in raising Q3 contracts by more than €100/tonne were also reported by a third European producer.

Despite such claims, only one large contract settler on the buying side confirmed that Q3 business had closed. The buyer reported that price discussions varied from producer to producer and that a mixed bag of settlements were achieved. A decrease of €35/tonne and an increase of €40/tonne were reported.

Another large resin manufacturer expected Q3 negotiations to be very tough, and did not anticipate a settlement until the middle of August. The MMA buyer said that the a rollover from Q2 to Q3 would be justified when looking at the supply/demand balanced in Europe.

Opinions about the supply situation in Europe were also mixed. Producers described a tighter market owing to the absence of Russia manufacturing and cracker issues effecting Repsol’s MMA production in Tarragona, Spain.

Demand was also described as reasonable and on forecast by producers. However, sellers confirmed that they had not experienced the strong growth seen in Q2, although they pointed out that demand had not moved into negative territory.

Consumers, meanwhile, failed to see any tightness in Europe, with some describing the MMA market as balanced to long.

It was still not clear if Saratovorgsintez's MMA plant in Saratov, Russia, would remain down for the second half of 2008, although sources in Europe expected it to stay offline.

The market continued to talk about the closure of the Dzerzhinsk Orgsteklo plant in Dzerzhinsk, Russia. The company had still not made an official announcement regarding this.

($1 = €0.64)

This week on ICIS news ( www.icis.com):

10-Jul-08 15:58 Rohm and Haas buy will lift growth, EPS - Dow

07-Jul-08 18:23 US phenol prices move up 7 cents

07-Jul-08 18:20 US MMA acetone settles up 6 cents/lb

07-Jul-08 17:32 US acetone soars 30% for distributors

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