MMA prices stable-to-soft
Prices of bulk methyl methacrylate (MMA) are stable this week, while prices of smaller-sized isotank cargoes of up to 500 tonnes softened this week, amid lower deals and buy-sell ideas.
Most Asian producers are still eyeing a rollover of offers for August, but have not decided on their prices yet. Only one major producer said he would nominate a roll over for August, amid rising feedstock acetone and naphtha prices.
More offers are expected to be announced only next week, one week later than usual, as most producers are adopting a cautious approach for their pricing strategies given that prices had softened by $50-80/tonne two weeks in a row in early July for the first time in 27 months.
Most producers said that a string of turnarounds in Asia will reduce supply and give support to prices. Recent plant issues surrounding a northeast Asia maker has yet to impact Asian market sentiment or prices, as the producer’s MMA unit is still running at full capacity.
The downstream cast sheet and emulsions segments are experiencing a seasonal lull in demand as the Muslim fasting month of Ramadan is due to begin on 1 August, market players said.
Demand for downstream general purpose (GP) grade and optical grade PMMA continued to be lacklustre. Despite poor demand since May, most northeast Asian PMMA producers have been running their plants at full tilt, but said they are looking at reducing their operating rates in the near future to reduce inventory pressure.
According to market sources, the latest total global television (TV) shipment outlook for 2011 has been reduced by about 3% to 252 million units, as demand in many developed countries continues to be lacklustre. This suggests a poor demand outlook for downstream light-guide panel (LGP) and transparent acrylonitrile-butadiene-styrene (ABS) applications, commonly used in flat screen TVs, ultimately dampening the demand outlook for MMA.
Hence, a northeast Asian transparent ABS maker has since reduced its plant’s operating rates to 70-80% and will reduce its MMA consumption by 30% until September to fend off rising inventory pressure. Meanwhile, another major transparent ABS producer is operating its plant at full tilt, although demand for ABS remains stable-to-soft.
Most market players expect that prices in August will remain soft, but prices may gain stability in September as the seasonal lull in the end-user market comes to an end. MMA prices are expected to bottom out in October, when end-users will enter their peak manufacturing season, amid optimism that downstream PMMA optical grade demand will improve.
Spot
Bulk cargoes of more than 500 tonnes were assessed as unchanged this week at $2,420-2,500/tonne CFR SE Asia. Offers were expected to emerge next week.
A major Japanese supplier said it will nominate a rollover price for August. Buying ideas for August were still locked in at a discount from July, capped at $2,420/tonne CFR SE Asia.
Southeast Asian buyers were only willing to accept a rollover price in September, but may consider accepting price increase in October, should supply be tight as a result of a demand recovery in the downstream LGP segment.
Prices on a CFR Taiwan and Korea basis are in tune with the market sentiment in the southeast Asian market and are assessed as unchanged at $2,420-2,480/tonne CFR Taiwan/CFR Korea.
Prices of iso-tank cargoes of up to 500 tonnes have softened by $10-40/tonne to $2,550-2,680/tonne CFR SE Asia, reflecting lower deals and discussion levels.
The highest selling idea in the market is at $2,700/tonne CFR SE Asia, however no deals were concluded at this level this week. A producer said he will try to target his August price at $2,700/tonne CFR SE Asia.
Up to three isotanks cargoes were heard to have been accepted at as high as $2,680/tonne CFR SE Asia. Meanwhile other isotank cargoes were able to fetch around $2,550/tonne CFR SE Asia, said market players.
Some producers said they are pressured to reduce their prices and may consider concessions for some customers.
In the Chinese domestic market, prices are stable-to-soft this week this week. Some market players said that sentiment in the Chinese domestic market has been dampened slightly by the recent softening of prices seen in the Asian market.
Prices were assessed mixed this week. Prices were yuan (CNY) 100/tonne higher on the low end but were softer by 200/tonne on the high end of the range at CNY18,600-19,300/tonne EXWH in eastern China by Friday’s close.
Prices in southern China are softer by 200/tonne on the high end of the range this week. By Friday’s close, prices were hovering at CNY19,000-19,700/tonne DEL.
Downstream
Asian general purpose (GP) PMMA spot prices were assessed as $50/tonne lower at $3,150-3,200/tonne CFR SE Asia and were stable at $2,900-3,100/tonne CFR China on 28 July.
Production News
Formosa Plastics Corp (FPC)‘s 98,000 tonne/year MMA acetone cyanohydrin-based unit is unaffected by the fire this week at Formosa group’s Mailiao complex and is still running at full tilt as of 29 July, a company source said.
The company is monitoring the situation closely but there are no plans to shut the MMA unit at the moment, as a decision would depend on the result of safety checks, he added.
The firm has received several enquiries from customers on whether supply would be affected, but the situation remains unclear, he added.
South Korea’s Daesan MMA (DMMA) plans to shut its 50,000 tonne/year polymethyl methacrylate (PMMA) plant at Yeosu in the middle of August, a company source said.
The plant will be taken off line for around two weeks, he added.
The capacity of the PMMA plant was raised from 40,000 tonnes/year to 50,000 tonnes/year in January after a debottlenecking exercise.
Meanwhile, DMMA's upstream 90,000 tonne/year methyl methacrylate (MMA) plant at the same site is being run at 100% capacity after it was restarted one week earlier than expected on 12 July, the source said
The MMA plant, which was shut down on 8 June for a 40-day turnaround, was originally expected to be restarted around 19 July, the source added.
($1 = CNY6.44)
This week on ICIS news ( www.icis.com):
28-Jul-11 10:02 S Korea’s DMMA to shut PMMA plant in mid-August for turnaround
27-Jul-11 08:13 Taiwan's Formosa restart plans may get delayed by fire
26-Jul-11 16:40 US July barge acetone contracts fully settle down by 7% from June
25-Jul-11 07:17 S Korea June petrochemical exports grow 23.2% on higher prices
25-Jul-11 05:07 Brunei Methanol to shut Sungai Liang plant in September
