The scheduled shutdowns, production outages of regional plants, shortage of cargoes coming from US and Europe have led to low inventory levels for methyl methacrylate (MMA) in Asia. Despite rising resistance from downstream buyers, these factors may eventually lead to the MMA prices to hover at record highs for the next couple of months.
The leading MMA producers in the Asia include Mitsubishi Rayon Co, Sumitomo Chemical, Formosa Plastics, Lucite and Asahi Kasei. Present MMA prices are pegged at US$2400-2450/ton CFR SE Asia, with fresh offers going up by over 15%, notwithstanding reluctance on part of buyers. The increasing inhibition of the downstream players and the failure of the buyers to pass on the price hikes may see the prices of MMA to mount by September. As far as the outages in production are concerned, the five month shutdown of the 80,000 tpa plant at Singapore-based Sumitomo Chemicals augmented supply pressures. In addition, Formosa Plastics have halted the production of MMA after the poor margins in acrylonitrile (ACN) production forced them to close shutters. Deep-sea cargoes from US and Europe cost more than US$2500/ton CFR Asia and have a long shipment time adding to the woes. Apparently, the Japanese inventories for MMA have dropped by 4000 tons for June and July from the otherwise 20,000 tons.
However, the month of September might witness prices topping off, as downstream users prefer to wait and watch. Buyers are unwilling to buy at such high prices as they cannot pass on the price hikes to users. End-users are cautious about stockpiling in anticipation of a price dip, after the plunge in crude oil prices that has triggered a sharp drop in feedstock prices
18-Aug-08 
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