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MARKET OVERVIEW
In January, overall
demand remains bleak, hindered by low operational levels at downstream
factories due to the financial year-end and preparations for the upcoming Lunar
Chinese New Year. The New Year holiday spans from 25th of December 2024
to 5th of January 2025, with the Lunar New Year holiday running from
25th of January to 2nd of February. Global market demand
continues to face bearish pressures, driven by political uncertainties in the
Middle East, heightened tensions between Russia and Ukraine, and persistent concerns
in China, where recent stimulus measures have had limited effect. Furthermore, the
return of Donald Trump to the presidency is expected to reinforce his
"America First" agenda, potentially reshaping global trade and market
policies. In South Korea, the sudden announcement and subsequent lifting of
Yoon Seok-yue's martial law underscored the intense polarization within the
nation’s political landscape. This development highlighted deep-seated social
dissatisfaction stemming from generational divides, widening income inequality,
and economic discontent. According to South Korean court statistics, corporate
bankruptcy declarations reached 1,380 as of October—a 27.7% increase compared
to the same period last year—marking a record high. Over the past decade, South
Korea's seven major industries, including semiconductors, shipbuilding, steel,
and petrochemicals, have experienced increasing competition from mainland
China. While most sectors have been surpassed, South Korea maintains a slight 1
% lead in the petrochemical industry. The depiction of the economic growth
situation is as follows:
Source: Korea National Statistics Office Watchmaker:
Kang Zhangrong
According to Oxford
Economics, global construction output in 2024 is projected to grow by 2.7%
compared to 2023, while 2025 is expected to show a more modest growth of 2.3% over
2024. On the logistics front, statistics from industry players indicate that
major European shipping lines are expected to continue detouring around the
Cape of Good Hope in the first quarter of 2025. This move is a response to the
ongoing Red Sea crisis caused by Houthi attacks on vessels, unrelated to negotiations
between Israel and Lebanon. Meanwhile, labor negotiations at U.S. East Coast and
Gulf of Mexico ports have reached a temporary agreement to increase wages by
61.5% over six years. However, the contract only extends until 15th of
January – just five days before President-elect Trump’s inauguration – raising concerns
about potential strikes as unresolved automation issue persist. On the downstream
side, the MMA market remains under pressure, with reduced
demand driven by high inventory levels and scaled-back purchases ahead of the
traditionally weak year-end period. Buyers focused on destock, citing weak
underlying demand. Contract negotiations are nearing conclusion before the New
Year holiday. Consumer activity is expected to gradually recover as the deep
recession in construction and automotive demand shows signs of easing. Logistical
challenges are likely to diminish, reducing barriers between the East and West.
The outlook for MMA prices in February remains subdued. Stabilization in prices
hinges on improved market confidence and stronger demand, as supply constraints
and sluggish demand continue to weigh heavily on the market.
FEEDSTOCK
On the feedstock
side,
OPEC+ has delayed
production increases from January to April 2025 due to weak demand and an anticipated
supply surplus. Donald Trump plans to boost fossil fuel production, emphasizing
expanded drilling activities, while Treasury Secretary nominee Scott Bessent
has proposed an economic plan targeting an additional output of 3 million
barrels of oil per day. On the 11th of December, the European Union
announced a blacklist targeting dozens of oil and gas tankers linked to Moscow's
billions in illicit fossil fuel revenues. OPEC revised its world oil demand
forecast downward to 1.4MMb/d from 1.6MMb/d in 2024. Despite this, the IEA maintains
optimism for stronger Chinese demand, following Beijing’s announcement of plans
to implement a looser monetary policy in 2025. The IEA forecasts demand growth
of 1.3MMb/d for 2025. Oil prices forecast remains steady, with WTI projected to
average US$69.89 per barrel and Brent US$74 per barrel in 2025. Crude oil
prices as of December 30 were US$70.6/bbl for WTI and US$74.17/bbl for Brent,
within a stable range of US$70–75 per barrel. Upstream, naphtha prices continue
to decline to US$620~660 pmt in Northeast Asia, reflecting oversupply and weaker
profitability for refiners. Propylene market sentiment remains bearish, with spot
prices range-bound at US$820-860 pmt CFR Asia owing to limited demand and cost
pressures. Methanol prices have stabilized at US$330~350 pmt CFR Taiwan amid
balanced supply-demand dynamics. Spot ethylene demand is weak, as most
derivative producers are running lean through year-end, with prices steady US$850-900
pmt CFR Asia. Acetone demand has slowed due to the seasonal downturn factors and
ample supply, pushing prices down to US$660~700 pmt CFR SE Asia. MTBE prices saw a
slight increase to US$690~740 pmt CFR Asia but remain lackluster. The recent declines
in acetone and MTBE prices have intensified pressure on MMA market,
necessitating further prices moderation. However, this poses challenges for MMA
producers striving to improve production economics. The added pressure on the MMA
markets has led to a notable uplift in overall downward pricing momentum. To
balance the market flow, prices will need to drop even further – a scenario
that is far from favorable for MMA producers seeking improved margins and
production viability.
PRODUCTION AND MARKET
Europe: the MMA market appears
to have ample supply despite limited imports, with some low-priced MMA available.
Market demand remains sluggish owing to end-of-year destocking, and final
contract negotiations are expected to conclude ahead of the Christmas and New
Year holiday period. Automotive and construction sectors continue to experience
low demand. Most requirements are being met through minimum contracted offtakes,
reducing the need for spot MMA purchases. Production updates include Trinseo's
90kpta MMA plant in Roh, Italy, which is expected to remain offline until the end
of 2024.
On the 17th
of December: Röhm GmbH announced a Europe-wide alliance for sustainable PMMA recycling established:
·
Sustainable, economically efficient circular system
·
Network offers take-back and value-added recycling of all PMMA waste
· Open to all PMMA processing companies in Europe
· High-quality, certified products made from recycled raw materials without
compromising on quality.
United States: the MMA market is
winding down ahead of holiday. Dow 425kpt MMA plant in Deer Park is reportedly
planning a maintenance shutdown in Q1 2025 and Röhm
GmbH and OQ Chemicals are collaborating on a 250 kpta MMA plant in Bay
City, Texas, utilizing Röhm’s LiMA technology, with the start-up targeted for Q1
2025. It’s been reported that average operating rates for acrylonitrile were
estimated at 66% in December, while the MMA sector operated at 65~75%. On the
downstream side, US auto sales in November showed a slight improvement compared
to the previous month, however, proposed tariffs on Mexican and Canadian
imports by President-elect Donald Trump could create additional challenges for
the industry. While there is significant pent-up demand in the housing market, high
mortgage rates and affordability issues are likely to hinder recovery efforts
in 2025. Moreover, immigration restrictions under the new administration could exacerbate
labor shortage, slowing down construction activity further.
Asia: following steep
MMA price drops in recent months, market demand remains subdued, influenced by
ample inventories and buyers scaling back MMA purchases ahead of the
traditionally weak year-end holiday period. Buyers not carrying high
inventories have opted to focus on fulfilling contractual commitments rather
than engaging in spot purchases. Sellers, on the other hand, are grappling with
rising inventories caused by prolonged weak demand. Additionally, a stronger US
dollar has dampened import confidence in Asia. MMA operating rates remain low,
hovering at approximately 50~60%.
·
In Japan, it’s reported that Ashai Kasei’s 100kpta MMA plant in Kawasaki has
been undergoing maintenance since 15th of September, with no confirmed restart
date.
·
In Taiwan, it’s been heard that FPC 98kpta MMA plant in Mai Liao is
expected to undergo a turnaround from mid-December to mid-January, aligning with
the maintenance of its upstream 280kpta acrylonitrile (AN) plant.
·
In South Korea, Lotte Chemical Crop. reportedly initiated the shutdown
process for its ethylene glycol (EG) and methyl methacrylate (MMA) production
facilities at Yeosu Plant 2 in late November.
CHINA MARKET OVERVIEW
On the domestic
market, price direction remained dictated by two key contrasting factors,
namely snug availability and lackluster demand. The market sentiment softened a
bit and spot prices dropped slightly amid increased supply. Some downstream
buyers exhibited resistance to high prices, opting to purchase as needed due to
unfavorable margins. According to ICIS data, MMA prices were assessed at CNY
11,300~11,600/mt ex-work during end December. Chemical Market Analytics
estimates that average operating rates in mainland China were around 69% in
December. Reports indicate that the overall MMA operating rate has slightly
increased to 65-70%, with the following notable updates on the market supply
situation:
1. Jiangsu Jiankun
Chemical’s 150kpta MMA plant in Jiangsu restarted
in December.
2. Zhejian PC’s 180kpta MMA plant is shutting down its No. 1 MMA unit
for maintenance.
3.
Shenghong Group, Jiangsu Sierbang Petrochemical Co., Ltd’s 340kpta MMA
plant in Lianyungang, plans to shut down for maintenance NO. 1 MMA unit and has
reduced production in Q4.
4.
PetroChina Jilin plans to shut down Jievang MMA unit.
5.
Oixiang Tengda 200kpta MMA plant in Shandong plans to shut down No. 1 MMA
unit for maintenance and reduce production at its NO.2 MMA unit.
Nevertheless, it is
worth highlighting that, despite this growth, these regions collectively
account for only about 13% of China’s projected demand next year. Additionally,
trade protectionist measures, including the potential tariff increase on
Chinese goods proposed by the new US government, are likely to impact China’s
exports next year in the coming year. In response, it is anticipated that the
Chinese government will introduce more stimulus policies aimed at boosting
domestic demand.
DOWNSTREAM
On the PMMA side, demand
fundamentals have softened due to sluggish year-end activity. Upstream MMA
prices remain flat, providing stability to PMMA. In China, PMMA supply is
constrained by cautious monitoring of production rate and planned turnarounds, maintaining
a balance between limited supply and lukewarm demand. In the PMMA light
emitting diode (LED) television and general purpose (GP) grade sector,
discussions for locally sourced material were stable within the range of CNY 16,300/mt
to CNY 16,800/mt EXWH. Meanwhile, Southeast Asia GP spot prices declined to
US$2,100–2,300/mt CFR SE Asia
On the acrylic
sheet side, demand for cast sheet remains stable. Factories are planning
shutdowns during the Lunar New Year holiday during this period. In Indonesia,
market demand appears healthy, with reports that some buyers are continuing
their contract offtakes to maintain stable business operations. In Vietnam and
Thailand, lacklustre domestic demand from end-user sectors has been offset by squeezed
margins, resulting in significant curtailment in cast sheet pricing. Weak
downstream affordability remains a downside risk. Most cast sheet manufacturers
have maintained a low production rate, purchasing raw materials only on a need
-to basis. Negotiations for 2025 term contracts in Asia are nearly concluded. In
Taiwan, cast sheet factories are reducing MMA inventory between December and
January, affected by year-end closures and the Lunar New Year holiday. Domestic
MMA prices in January remain stable.
On the acrylic sheet side, the cast sheet prices were
range at US$2.30~2.70/kg CFR.
On the resin side
and others, ABS demand has been relatively stable compared to last
year, with the outlook suggesting demand will remain at similar level. Stabilized
production levels in the home appliances and consumer electronics sectors have prompted
ABS producers to adopt a cautious approach, moderating output. In the U.S., it
has been reported that the INEOS Styrolution ABS plant in Addyston, Ohio has ceased
operation, reducing overall ABS production in the US by approximately 130,000
metric tons. In China, the ABS market received a boost following the Chinese
government’s announcement of plans to ease monetary policy in the coming year,
signaling a focus on stimulating domestic consumption and supporting
investment. These macroeconomic policies, coupled with downward pressure on
styrene prices in the forward market, have created a mixed market outlook and
cautious sentiment among the ABS market participants. While ABS feedstock costs
increased, production economics for ABS deteriorated slightly. Demand from the acrylamide
sector remained firm, with acrylamide prices increased due to higher
acrylonitrile prices and improving demand. Meanwhile, demand from the NBR
sector stayed stable, but NBR prices rebounded, supported by bullish
acrylonitrile and butadiene markets. In India, some India MMA buyers continued
to hold buying indications at US$1,450/mt CFR India port or lower, making it difficult
for regional traders and producers to bridge the gap as export indications on a
FOB basis remained at US$1,450~1,500/mt from Asia.
MMA PRICES
|
US$/mt
|
|
January 2025 Price Range
|
December 2024 Price Range
|
|
Asia contract prices
for cargos ≦ 200mt or
more
|
|
1,590~1,690
|
1,590~1,690
|
|
Asia spot prices for
20~200mt
|
|
1,550~1,650
|
1,550~1,650
|
