MARKET OVERVIEW  

In Asia, tightened MMA supply continues to propel MMA prices upward by US$100~150 pmt in April. This increase is fueled by the ongoing surge in MMA demand from the USA and Europe, alongside escalating MMA prices in China and the struggles of most MMA plants with low inventory. In Europe, MMA production has been hindered by a rail strike in Germany and tensions regarding commercial ships, significantly disrupting the region’s supply of MMA and raw materials originating from East Suez. Many tankers have been compelled to take the longer and more costly route via the Cape of Good Hope or seek other alternatives options, thereby contributing to supply scarcity as facilities operate at reduced capacities. Additionally, on the first of March, RÖHM announced shipping restrictions for MERACRYL® methacrylate monomers. RÖHM assure that all contractually committed volumes are available and can be allocated. In America, tight MMA supply is expected to remain limited till Q2, as several MMA plants have planned shutdowns or reduced production between Q1 and Q2. Additionally, logistic costs are expected to increased moving forward due to Asia-US freight costs, while wait times at the Panama Canal edge lower before May. The transportation demand through the Panama Canal has decreased to 24 authorized crossings pre day until at least April. It’s been reported that if the expected rain occurs in May, the canal plans to gradually increase daily shipping schedules, with the goal of returning to about 36 ships per day. Furthermore, the Fed has kept interest rates steady and continued to signal three rate cuts this year, providing some support for market demand. Converse, the militant group Islamic State in Khorasan (ISIS-K) claimed responsibility for the terrorist attack on Russia's Saffron City Hall concert hall on 22^nd of March, resulting in the deaths of at least 137 people and injuries to over 100 others. Russian President Vladimir Putin insists that Ukraine is somehow linked to the terrorist attack, which he believes will escalate the situation in the Russo-Ukrainian war. The Israel’s occupation of Palestinian territories, which began on the 19^th of February, remains unresolved. As a result, geopolitical conflicts persistently keep the market on edge in Q2. Additionally, Argentina has been grappling with long-term inflation and a volatile exchange rate. After President Mirei took office, he allowed the peso to depreciate further, exacerbating the existing inflation, with the inflation rate soaring as high as 276%. On the market demand side, despite the high prices of MMA in Europe / America and the tight supply, most buyers are hesitant to commit to these high MMA offers. They argue that the increased cost of MMA can’t be passed on to end-user owing to persistently slow demand fundamentals. Consequently, MMA off-take in Asia and China remains to decline, prompting buyers to request that MMA prices remain rollover for April shipments. Looking ahead to May, the outlook for MMA supply remains tight and firm.

FEEDSTOCK

On the feedstock side, the Ukrainian drone attack targeted Russian’s largest refinery at Rosneft, causing a 10% decrease in capacity. Geopolitical tensions in the Middle East, coupled with the decision by OPEC+ to cut oil supply, have led to continuous hikes in oil prices. As a result, the oil prices have hovered around US$83~88 per barrel (with ICE Brent Crude Oil prices at US$87.48/bbl and WIT Crude Oil prices at US$83.17/bbl on 29^th of March). The economic trajectory for the US and Europe in 2024 is largely influenced by ongoing efforts to ease inflation and a gradual reduction in interest rates. These measures are expected to stimulate oil demand and contribute to economic growth in both regions. On the MMA feedstock side, the naphtha market is precarious situation following to disruptions in the Panama Canal, affecting availability, and recent incidents in the Red Sea, such as a naphtha-laden vessel being struck by a rebel missile. These events exacerbate geopolitical risks, impacting the supply chain and market stability. Additionally, refiners are preparing for the upcoming driving season and shifts in fuel specifications, which has provided support to naphtha markets. The prices have been steadily increasing to the range of US$680~730 pmt. In the Asian spot market of ethylene values have stabilized at US$900-950 pmt CFR. MTBE prices have continued to rise within the range of US$940~990 pmt CFR Asia. While weak downstream affordability continues to pose a downside risk for regional spot propylene prices, spot propylene values in Asia have nonetheless stabilized at US$850-870 pmt CFR Taiwan in order to tight supply. The supply of acetone remains tight amid ongoing Western inquires and limited selling pressure, resulting in continued price increases to US$840~990 pmt CFR China. Although the fundamentals of the methanol remain unchanged, the increase in crude oil prices has pushed methanol prices up to US$350~370 pmt CFR Taiwan. The crack spread remains low for the time of the year. Raw material costs have remained high after being comparatively low, moving up against ethylene, propylene and butene. Most MMA makers continue to face negative margins of MMA. However, the attractive netback in the US and Europe has boosted confidence and prices among Asian makers and sellers. MMA makers have indicated adjusted MMA pricing in Q2 to improve the margin.

PRODUCTION

In Europe, the shift to tighter spot MMA has been reflected in the spot market, with prices levels now typically sitting at or above levels usually seen for contractual sales. The MMA production issue that affected the market balance in late June has been resolved, and it is now the additional demand that is providing continued support for MMA prices. Sellers and buyers are fully aware of the tighter market position and the restriction in sourcing derivatives from deep-sea locations. It’s been heard that RÖHM 225kpta MMA plant in Worms, Germany, is planned to shut down for maintenance between 11^th to 17^th of March. Moreover, after Mitsubishi Chemical Corporation reported that some of their existing Methyl Methacrylate(MMA) utilizes raw materials derived from biomass, RÖHM announced on 14^th of March that customers have a choice at RÖHM: an extensive offering of sustainable products is available. This announcement indicates that the Worms and Wesseling production sites have received certification under the International Sustainability and Carbon Certification (ISCC) PLUS scheme. The sustainable product range is also continuously expanding. Selected products from all established brands, including PLEXIGLAS®, DEGALAN®, DEGAROUTE® and MERACRYL®, are already available with a reduced carbon footprint. These products, branded as proTerra, are based on a proportion of renewable or recycled raw materials. In the US, the upward movement in MMA prices, combined with a tight market, will give MMA sellers the upper hand in discussions and lead to an expected price increase. The MMA supply is expected to remain difficult in April owing to low inventory, which could keep supply security top priority. It’s been heard that the RÖHM MMA plant in Fortier, Louisiana, plans to shut down for maintenance in March. Additionally, the high spot acetone prices have driven up costs. MMA makers are monitoring feedstock availability, and hoping for some improvement in Q2, as it would lower input costs and boost MMA production. It’s been reported that MMA makers have announced an increase of 9¢~14¢ per pound between March and April. Additionally, while oversea logistics continues to impact imports, import from Asia are still limited as local production is curtailed and netbacks are higher in other regions. However, US domestics MMA prices are still cheaper despite price increases. In Asia, it’s reported that Singapore’s Sumitomo Chemical plans to shut down two units owing to muted market demand and high MMA costs. In Japan and Taiwan, it’s said that several MMA makers have cut or shut down their production rate in conjunction with the upstream acrylonitrile (AN) plant production cuts. South Korea and Thailand, averaging at 70~80%, are affected by upstream decreased run rate and high raw material costs. In China, while the upstream acrylonitrile market prices remained relatively stable, but rising acetone costs resisted MMA production between March and April. However, affected by shutdowns for maintenance in the USA and Europe during February to April, a gap in overseas demand appeared, leading to a year-on-year increase of 30~40% for export orders. Conversely, MMA makers increased their production slightly, with MMA operating rates increasing by 10% to approximately 60~70%, considering poor domestic market demand and high acetone costs. It’s heard that Shenghong Group, Jiangsu Sierbang Petrochemical Co., LTD 340kpta MMA plant in Lianyungang, plans to shut down one line in March. It’s said that Jiankun 150kpta MMA plant in Jiangsu, restarted in March and is running at approximately 60%. Reports indicate that Zhejiang Petroleum & Chemical 180kpta MMA plant in Zhejiang, Zibo Qixiang Tengda chemical co., Ltd 200kpta MMA plant in Zibo, and Dongming Huayi Jade Emperor New Materials Co., Ltd. 50kpta MMA plant in Shang Dong, are under plans to shut down. It’s heard that Liaoning Kingfa’s 260kpta acrylonitrile(AN) plants to shut down for maintenance, in line with a 100kpta MMA plant shut down in January. Influenced by current poor market demand and escalated geopolitical tensions, it’s difficult to justify acrylonitrile (AN) production. HCN supply situation is not improving, and the same is true for MTBE and acetone prices, which hovered at high level, dampened by overall market supply constraints persisting due to limited increases in operating rates. For the reason, MMA average running rate stable at 60~70%.

DOWNSTREAM

On the PMMA side, the demand for PMMA seems stable on the back of seasonal factors impacting trade activity. However, the tight supply of MMA not only supports demand for PMMA, but also encourages thoughts of selling prices for April shipments. The long-term reduction in global MMA production, along with the decrease in MMA stocks to dangerously low levels, has raised concerns about the MMA quality and the actual ability to extract MMA as stocks continue to decline. Most PMMA makers are hesitant to squeezed production margins and proposed price hikes owing to increased feedstock costs and the prolonged tight MMA supply situation. Hence, the spot prices for general-purpose (GP) PMMA in Southeast Asia shows a tendency to increase, reflecting a limited supply appetite. As the result, prices have risen to US$1,950-2,200/mt CFR SE Asia. In China, market demand remains lukewarm. However, the upstream methyl methacrylate (MMA) prices surged to CNY 13,000 ~ 14,000mt in March, extending gains on short availability as PMMA continued to post higher offer. This caused PMMA prices to increase to Chinese yuan (CNY) 15,000/mt ~ 15,800/mt EXWH for locally sourced material, with some discussions were observed at  (CNY) 16,000/mt ~ 17,000/mt EXWH. In South Korea, product scarcity was met with healthy demand, with uptake from the polymethyl methacrylate (PMMA) and the transparent acrylonitrile butadiene styrene(ABS) sectors. In Taiwan, it’s been heard that Chimei plans to continue their PMMA production line in April.

On the acrylic sheet side, during the Muslim Ramadan from the 10^th of March to 9^th of April and the Muslim Eid al-Fitr from the 8^th to 15^th of April, the market demand appears stable. Factories plan to shut down to celebrate the holiday during this period. In Indonesia, market demand appears healthy, and it’s heard that some buyers are seeking to secure MMA quantities as far in advance as May due to the tight supply and most MMA makers are under allocated base. In Vietnam and Thailand, lacklustre domestic demand from end-user sectors has been balanced out by squeezed margins, leading to significant curtailment in cast sheet pricing. Cast sheet makers continue to express dissatisfaction, stating that the increase in MMA costs couldn’t be adequately reflected in their end-user prices, and weak downstream affordability remains a downside risk. Most cast sheet have maintained a low production rate recently, only buying on a need -to basis. In Taiwan, domestic market demand continues to be weak, leading cast sheet makers to reduce their production rates. However, local MMA makers announced a NT$2~3/kg prices increase in April owing to tight MMA supply and boost export MMA prices.

On the acrylic sheet side, the cast sheet prices ranged from US$2.65~2.90/kg CFR.

On the resin side and others, most resin and acrylonitrile butadiene styrene (ABS) makers will be eager to recoup some of the ground lost in the past 13 months, as lower price spreads against finished products and large discounts have weighed on revenue streams. However, the speed at which sellers will be able to effect that correction is likely to be limited. The price mechanism is not conducive to dramatic corrections; sellers have spent much of the past months resisting a downwards move in price and are likely to encounter buyers slowing the process of any upward market correction to the monthly contract price. On the acrylonitrile butadiene styrene (ABS) supply side, the average operating rate at China’s domestic was at around 50~60%. It’s heard that Toray Plastic Malaysia, Taiwan’s Formosa Chemical and Fiber Corp (FCFC) and Taita Chemical, South Korea’s LG Chem run around 70~80%. Reports indicate that China’s LG retains their production at full capacity. Demand from the acrylamide and artificial marble sector remains relatively stable, however, producers have opted for shutdowns to conduct maintenance activities amid unfavorable margins. In India, MMA supply remains tight, and it’s heard that bulk shipment are discussed in the range of US$1,850~1,900/mt CIF India port. Additionally, Asia Petrochemical Industry Conference (APIC) will be celebrated during 30^th ~31^st of May in Korea to share information, build cooperation, and pursue the development of petrochemical industry in Asia. 

MMA PRICE