US contract prices for methyl methacrylate (MMA) were unchanged for the week ended 29 July, and August negotiations are expected to start soon.
Sources said that with the fall in the US barge acetone contract in July, August MMA prices have room to fall.
Most buyers argued that MMA margins remain strong for producers, and that some of those margins need to be passed along down the chain.
A producer said it thought the August MMA price could fall, but only by 1-2 cents/lb ($22-44/tonne, €15-31/tonne).
This is because the supply-demand balance continues to favour producers, as supply is tight and demand is strong.
As a result, most producers said they expect the contract price to roll over month on month.
Buyers said they continue to want more material at contract prices, but are under allocation levels because of the tight supply.
However, demand is not strong enough to support much buying on the spot market, as it continues to be priced at a premium of up to 50 cents/lb to contract material.
The plastics and sheet market for MMA remains the biggest driver of demand, although forecasts for 2011 TV demand have been tamped down by weaker sales in developed countries.
In the coatings market, US home sales increased in July, but the remodelling market index dipped, mostly because of concerns about the economy. This is expected to decrease demand for MMA from the coatings market.
MMA supply remains tight, with producers running at full-out rates in order to meet as much of the demand level as possible.
Feedstocks
The July US barge acetone contract price dropped by 4.5 cents/lb from June levels, tracking lower feedstock costs and a balanced market in terms of supply and demand.
The US August contract price for Tampa ammonia moved up by $5/tonne on strong demand from the agricultural and industrial markets.
The US August contract price for methanol nearly reached a three-year high, increasing by 10-11 cents/gal on tighter supply because of production issues.
($1 = €0.70)
This week on ICIS ( www.icis.com ):
29/07/2011 17:43 Petrochemicals producers, refiners wary over second half
29/07/2011 15:28 Tropical Storm Don moves closer to US Gulf coast at Texas
28/07/2011 17:46 US pending home sales rise for second straight month in June
28/07/2011 15:41 INSIGHT: Default lies not in our stars but in ourselves
26/07/2011 15:40 US July barge acetone contracts fully settle down by 7% from June
