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SubjectAcrylic World Newsletter - Sep. 2021
Published Date2021/9/1
Content

MARKET OVERVIEW

In September, Asian MMA producers announced MMA prices rollover on the back of the sluggish market demand as driven by the downward pressure of lockdown in several countries and cities, and the pessimistic economy outlook as a result of the Covid-19 Delta variant crisis. The resurging Covid-19 daily death rate in the US is alarming, hitting 1,000 per day which was the level last seen in March. This synchronized with five US states —Florida, Louisiana, Hawaii, Oregon, and Mississippi—reached new peaks for Covid-19 daily new cases. There are 140k daily Covid-19 cases based on a 7-day moving average and the level almost same as January 2020. It’s reported that confirmed case of Covid-19 has mounted to over 214.8 million cases end August globally (including around 39 million cases in America, 32.5 million cases in India, 20.6 million cases in India, 6.8 million cases in Russia, 6.67 million cases in France, 6.59 million cases in United Kingdom, 6.27 million cases in Turkey, 5.15 million cases in Argentina, 4.89 million cases in Colombia), and the mortality rate decreased to 2%. As the Covid-19 delta variant spreading globally again in the past couple weeks, the global economy is appearing weak and is clear that MMA demand is entering a soft-to-weak status. Furthermore, MMA market demand remains shrinking as affected by the deteriorated situation in Vietnam, Malaysia and Indonesia where the government implemented lockdown in major cities between August and September. The economic and manufacturing activities had been badly affected by this difficult situation. Without exception, MMA market is becoming lackluster owing to the Covid-19 Delta variant that simply decimated the demand. Even with the bearish downstream demand globally, the supply situation is not improving due to the restriction of force majeure at Dow Chemical 475kpta MMA plant in Deer Park, Texas and Roehm 225kpta MMA plant in Worms, Germany whilst MCM Group supply constraint remains, and the global MMA inventory is depleting. The additional challenges are the high raw materials cost, the recent sharp surge of acetone cost increase by US$200/mt, and the logistic issue with high freight costs limiting global trade, not only MMA supply but also for downstream products. It’s heard MCM 155kpta MMA plant in Memphis, Tennessee in USA plans to shut down around October and the other 200kpta MMA plant in Billingham, UK will be shut down in Q4, too. It’ heard Japan Mitsubishi Chemical will plan shut down for 3 weeks maintenance in September. It’s heard Thailand PTT Asahi Chemical pended restart in August. It’s heard Shangdong Wangda Group HongXu shut down for 10 days maintenance during 27th of August to 5th of September. The prices of acrylonitrile (AN), the upstream of MMA, is rather depressed. Based on the current propylene price, the AN production is difficult to be justified. For this reason, acrylonitrile (AN) average operation rates decreased to 85%. In China, it’s heard Shandong Haili experienced an unplanned outage during end July to August amid inclement weather and mechanical issues. It’s heard Zhejiang Petrochemical announced delayed Phase II commissioning from July to August and will run at below nameplate capacity due to feedstock supply issues. PetroChina Daqing Petrochemical shut down its 80kpta unit for maintenance during August to September. Shanghai Secco 520kpta acrylonitrile (AN) plant run with reduced rate on the three lines and one line of 130kpta shut down for a week maintenance amid the unexpected mechanical issue. Similarly, Jiangsu Sailboat reduced production rate for three lines and unplanned shut down one line. In USA, it’s heard INEOS Nitriles 100kpta acrylonitrile (AN) plant at Lima, Ohio will shut down for 40~45 days maintenance in October. In Brazil, the Acrinor acrylonitrile (AN) plant shut down for 15 days maintenance in August. In Europe, the Dralon 120kpta acrylonitrile (AN) plant at Cologne, Germany cut production rate to 80%, with the INEOS Nitriles 240kpta acrylonitrile (AN) plant at Cologne, Germany run at full rate and lifted force majeure. The Anqore 280kpta acrylonitrile (AN) plant in Netherlands, cut production rate following propylene supply issues. In Russia, the Lukoil 190kpta acrylonitrile (AN) plant delayed restart amid the prolonged maintenance turnaround. In Belarus, Polymir 90kpta acrylonitrile (AN) plant cut production rate to 70%. In Turkey, Petkim 100kpta acrylonitrile (AN) plant is expected to restart after 10 days shut down in August. Hence, the byproduct HCN, which is the raw material for MMA, is still tight and at high costs. Producers therefore are hesitated to decrease MMA price despite of weak demand affected by the gloomy economic conditions. In Europe, the supply and demand appears balanced to tight due to healthy market demand and tight MMA supply. In USA, MMA prices remain firm due to high feedstocks costs and tight MMA supply. On MMA feedstock side, the crude oil prices fell on the back of a volatile demand outlook with the spread of the Covid-19 delta variant globally, particularly in Asia where movement restrictions have remained since July. For this reason, the crude oil price slightly decreased with values around US$65~73/bbl (with ICE Brent crude oil prices at US$72.12/bbl and WIT crude oil price at US$68.54/bbl on 27th of August). Naphtha prices were cool down and decreased to US$600~650/mt, however, the methanol prices were continuously increasing to US$370~390/mt amid the tight supply. Propylene prices stable at US$950~1050/mt owing to tight supply and strong demand. MTBE prices were decreasing to US$650~750/mt. Ethylene prices were slight decreasing to US$950~1,000/mt owing to poor market demand. Acetone prices were largely increasing to US$720~820/mt on the back of tight supply. On the downstream PMMA sector, the he light emitting diode (LED) television (TV), general purpose (GP) grade sector demand were under pressure from bearish demand cited with the lull season and low downstream operating rates. For the ABS segment, the demand strengthened ahead of the traditional peak and availability was curbed as port restrictions ensued. The weak demand for emulsion and acrylic cast sheet sector affected by the MMA offtake kept shrinking and factory running rate continued to be low, especially it’s heard the low priced MMA finished products coming from China, which dampened the MMA prices for September shipment and resulted in buyers taking wait and see attitude. The outlook for October is ambiguous. However, the confidence of market demand resuscitation is the key to decide the future direction.

  

NORTH ASIA

In North Asia, China domestic MMA prices were significantly softer at end August, against the backdrop of the MMA prices soared up rapidly during end July to early August. This indicates that most buyers retreated to the sideline for wait and see attitude and only buy on a need-to basis. This is probably due to the expectation of two new MMA plants coming on stream in Q4, Zhejiang Petrochemical commissioning their phase II expansion for 260kpta AN plant together with 90kpta MMA plant during August to September and Jiangsu Jiankun Chemical commissioning 150kpta MMA plant in Jiangsu Taixue around early Q4. Besides, the polymethyl methacrylate (PMMA) domestic market appears stable-to-soft while MMA price is under downward pressureMMA prices decreased around RMB1,000~1,500/mt to RMB13,000-14,000/mt DEL. However, the acetone prices increment recently pushed ACH process costs higher and limited MMA supply since the most MMA producers cut production rate. Furthermore, the market was generally muted as affected by the series of logistics restrictions amid the spread of COVID-19 Delta variant during middle August and the subsequent spread at some other provinces. China government restricted transportation which led to higher freight costs and lower purchasing activities. In Korea, supply appears balanced for polymethyl methacrylate (PMMA) sheets while LCD and transparent acrylonitrile-butadiene-styrene sectors appear stable. It’s heard South Korea’s Lotte MCM PMMA plant has planned shutdown for No.1 unit for 21days maintenance in August. In Japan, domestic market remains stable. It’s heard Asahi Kasei PMMA plant in Chiba, Japan will shut down for 5~6 weeks maintenance in early September. In Taiwan, local MMA producers announced NT$1/kg decreased for MMA prices in September in consideration that domestic market remains sluggish. It’s heard major local PMMA producer planned shut down during late August to September. The price range is NT$65 ~ NT$69/kg DDP.  

The downstream demand of general purpose (GP) polymethyl methacrylate (PMMA) remains weak and some suppliers may have selling pressure. The general purpose (GP) PMMA price is in the range of $2,200-2,450/mt CFR Southeast Asia. China PMMA price continued to be under downward pressure and the price decreased RMB 1,000/mt. PMMA price is in the range of RMB15,000~17,000 pmt DEL, depending on the origin and end-use.

  

SOUTH ASIA

In South East Asia, market demand was stagnant on the back of lackluster economy cited with Vietnam, Malaysia and Indonesia extended the lockdown at major cities to September. Most cast sheet makers continued running at low operation rate or shut down because of the serious infection of Covid-19 Delta variant. In Indonesia, domestic market appears weak. In Vietnam, domestic market demand remains poor. It’s heard most of cast sheet makers were forced to shut down since July because of the lockdown at major cities amid the alarming infection of Covid-19 Delta variant. In Thailand and Malaysia, domestic market appears bearish as affected by the current wave of Covid-19 Delta variant situation. In India, domestic demand appears healthy prior to Diwali celebration which should help demand picking up.

On acrylic sheet side, the cast sheet prices were in the range of US$2.90~3.3/kg CFR Asia.

MMA Prices

US$/mt       

September 2021 Price Range

August 2021 Price Range

Asia contract prices

1,850~1,970

1,850~1,970

Asia spot prices

2,100~2,400

2,050~2,400

 2021 8.png



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