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SubjectAcrylic World Newsletter - Aug. 2022
Published Date2022/8/1
Content

MARKET OVERVIEW

In the wake of crude oil prices decreased to US$95~100 per barrel, prices of naphtha, ethylene and propylene were driven down. With the weaker economic outlook as affected by the global inflation, MMA price is facing the toughest challenge as a result of declining market demand and cheap MMA prices from China makers. In the meantime time, MMA supply appears sufficient on the back of shrunk market demand. In addition, Russia cuts natural gas supplied to Europe, which continued natural gas prices increasing more than 6 times higher comparing the same period last year. The bankruptcy of Sri Lanka and China's unfinished building storm affected by the wave of loan suspension. Buying interest tapered off, which resulted in economy is elevated and the recessionary forces. On the supply side, MMA market continues its tightness, with low run rate and maintenance shut down affected by the lower Acrylonitrile(AN) running rates made less hydrogen cyanide(HCN) available for C3-process MMA production and hovering on high MTBE level for C4-process ahead of the high costs pressure on the back of increment natural gas and energy costs, with weak global market demand. In Europe, the sluggish demand between July and August is the typical summer slowdown, which is expected to erode demand and this has seen MMA producers squeezed with falling MMA prices and volatile energy costs. It’s heard Trinseo 90kpta MMA plant at Rho, Italy, continues to cut operation rate to 75%, and both Roehm 95kpta MMA plant in Wesseling and 225kpta MMA plant in Worms, remain run rate to 70%. It’s heard Mitsubishi Chemical Methacrylates (MCM) Lucite 200kpta MMA plant in Billingham, UK, decided not restart in July. In America, the high interest rates leaded to crash downstream demand. It’s heard most MMA makers run at low level on the back of decreasing demand and global economic uncertainty. In China, it’s heard Mitsubishi Chemical Methacrylates (MCM) group Lucite 180kpta MMA plant in Shanghai, running at low level synchronized with the upstream SCCO 520kpta acrylonitrile (AN) plant cut production rate and shut down between July and August. It’s heard Shenghong Group, Jiangsu Sierbang Petrochemical Co., LTD. 255kpta MMA plant in Lianyungang and Jilin PetroChina 200kpta MMA plant in Jilin, cut production rate since June. In Taiwan, it’s heard Formosa Petrochemical Corp (FPC) 98kpta MMA plant at Mailiao will plan shut down between August and September for maintenance in line with upstream 280kpta acrylonitrile (AN) plant maintenance. It’s heard Kaohsiung Monomer Chemical ( JV between Mitsubishi Chemical Methacrylates (MCM) and China Petrochemical Development Crop.(CDPC)) 100kpta MMA plant in Kaohsiung, will plan shut down 2 weeks for maintenance, at the same time, upstream China Petrochemical Development Crop.(CDPC) AN plant plan shut down in August owing to poor market demand. In Singapore, it’s heard Sumitomo Chemical 53kpta (No.1 unit) MMA plant in Jurong Island, planned shut down for 30~45days maintenance in July. In Thailand, it’s heard Thai MMA cut production rate to 70% due to raw material shortage for C4-process MMA. For the MMA upstream acrylonitrile (AN) side, the AN price remains weak and several plants shut down for maintenance or cut production between July and August. In South Korea, it’s heard Taekwang Industrial 290kpta acrylonitrile (AN) plant is running at 90% and it’s heard Tongsuh 265kpta acrylonitrile (AN) plant cut operation rate recently. In China, it’s heard SCCO 520kpta acrylonitrile (AN) plant shut down one 130kpta line in middle of July following technical issue. It’s heard Shangdong Haili has delayed restart since from 28th March and another Keluer 260kpta acrylonitrile (AN) plant planned shut down one 130kpta line for maintenance, however, the restart has been postponed. It’s heard PetroChina Jilin is running at 90% since early May. It’s heard PetroChina Fushun Petrochemical 92kpta acrylonitrile (AN) plant planned shut down for maintenance from 5th-24th July. It’s heard Zhejian Petroleum & Chemical 520kpta acrylonitrile (AN) plant, one 130kpta line un-expected shut down from 11th~23th July owing to minor technical issue and the restart is heard postponed to H1 August, other three lines are running at 95%. In Taiwan, it’s heard China Petrochemical Development Corp (CPDC) 240kpta acrylonitrile (AN) plant in Kaohsiung, planned shut one 120kpta line from 20th July. It’s heard Formosa Plastics Corp 280kpta acrylonitrile (AN) plant in Mailiao, will shut down between August and September owing to sluggish market demand. In Thailand, it’s heard PTT Asahi Chemical acrylonitrile (AN) plant reduced operation rate in the week of 18th July. On the MMA feedstock side, the crude oil prices slight decreased to US$95~105/bbl (with ICE Brent crude oil prices at US$102.46/bbl and WIT crude oil prices at US$94.79/bbl on 22th of July).  Ethylene prices dropped sharply to US$850~950/mt as influenced by the naphtha prices plunged to US$480~530/mt. Propylene prices dropped steeply by US$100/mt and reached US$900~1,000/mt level. This caused MTBE prices decreased to US$1,000~1,100/mt. Methanol prices slightly slide down to US$360~400/mt. Acetone prices were continuously decreasing US$100~150/mt and in the range of US$550~650/mt, which led to the gloomy economic conditions. The confirmed case of Covid-19 has mounted to over 579 million cases at the end of July (including around 92.9 million cases in America, 43.9 million cases in India, 33.7 million cases in Brazil, 33.7 million cases in France, 30.7 million cases in Germany, 23.3 million cases in United Kingdom, 20.8 million cases in Italy, 19.6 million cases in South Korea, 18.5 million cases in Russia), and the mortality rate decreased to 1.15%. The overall downstream demand has weakened and the current market fundamentals are pessimistic. The demand of polymethyl methacrylate (PMMA) has been weakened following the light emitting diode (LED), television (TV), general purpose (GP) grade sector and ABS segment cut or stopped operation and therefore MMA contract volumes has reduced. The emulsion and acrylic cast sheet sector suffered from the weak demand and MMA offtake kept shrinking and factory running rate at low level. MMA producers announced MMA prices decrease US$150~200/mt for August shipment whereas most buyers, to the contrary, expects MMA prices to be lowered down and adopted a more conservative attitude in view of the pessimistic economy state of the escalating global inflation and the hovered energy costs limited their production rate. The outlook for September MMA price is remaining at the same level, and the general economy and market demand going forward is the key factor to determine the MMA prices.

 NORTH ASIA

In North Asia, China MMA market demand remains subdued and MMA plants operating rate have plummeted, partly caused by the severe logistic constraint due to the coronavirus spread remaining and the tumbling market demand. MMA prices decreased RMB500~1,000/mt and in the range of RMB 11,000 ~ 12,000 pmt DDP. It’s heard the average operation rate of MMA plants in China is only at 60~70% as a result of the limited upstream ACH supply from acrylonitrile (AN) plant, which most acrylonitrile (AN) plant cut production on the back of sidelined market demand. In Korea, domestic market remains bearish. The downstream PMMA demand remains poor and no demand export to China market, therefore Korean MMA producers became more aggressive toward export business. It’s heard Korea MMA maker quoted low than US$1,700/mt CIF India port for August shipment. In Japan, poor MMA market prices and several MMA plants production control compelled some Japanese producers to be less aggressive toward South East Asia market sales. In Taiwan, local MMA producers announced decreased NT$1~2/kg MMA prices in August, in consideration that domestic market remains sluggish and estimated the global downstream demand appears lull. It’s heard Kaohsiung Monomer Co. 100kpta MMA plant at Ta-Sheh area in Kaohsiung will plan shut down two weeks in August and FPC 98kpta MMA plant at Mailiao in Yunlin, will plan shut down between August and September in conjunction with the upstream CDPC and FPC AN plant will proceed shut down for maintenance. MMA prices were NT$64 ~ NT$69/kg DDP.

The downstream PMMA remains bearish. PMMA prices were in the range of US$2,200-2,400/mt CFR SE Asian. China domestic market prices were widely heard at low RMB 14,000~15,000 pmt. 

SOUTH ASIA

 In South East Asia, market demand was stagnant on the back of lackluster economy. Most cast sheet makers continued running at low operation rate and destock between July and August because of the weaker market fundamentals. It’s heard the finished products produced with low priced MMA coming from China dampened the MMA prices for August shipment and resulted in buyers taking wait and see attitude. In Indonesia, domestic market remains stable. In Vietnam, both domestic and export demand decreased 20%~30%. It’s heard China low cast sheet prices at US$2.4~2.5/kg approached to domestic market affected by the cast sheet prices down in July. For the reason, MMA offtake became slow for August shipment. In Thailand, domestic market supply appears to be sufficient, surplus domestic MMA supply drove MMA prices downward in the market. In India, domestic demand appears lackluster.

 On acrylic sheet side, the cast sheet prices were in the range of US$2.9~3.3/kg CFR Asia.

MMA Price   

US$/mt       

August 2022 Price Range

July 2022 Price Range

Asia contract prices

1,915~1,995

2,015~2,095

Asia spot prices

1,800~2,000

2,150~2,200

 2022 Aug.png



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