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Europe MMA August contracts fall for 17th month on depressed fundamentals
European methyl methacrylate (MMA) August contracts have settled at a double-digit decrease, marking the 17th consecutive monthly decrease, on the back of persistent weak fundamentals.
- Little optimism for H2 demand - Lower Middle Eastern imports amid SAMAC outage - European turnarounds to start up in September
MMA contracts settled at €2,105-2,145/tonne FD (free delivered) NWE (northwest Europe), a €50/tonne decrease on the lower end, and a €30/tonne decrease on the high end from July.
Excess global supply, depressed demand, and feedstock drops all contributed to the downward pressure on pricing.
September contract talks are in the early stages, with stable-to-soft targets muted so far, with the magnitude of the pricing drops slowing. This is in reflection to the easing of the global oversupply, linked to lower operating rates throughout the year, planned outages, and some unplanned hiccups.
Spot prices were stable this week, with players monitoring higher prices in China closely as they are eroding the arbitrage gap between Asia and Europe.
There was also a further production upset in the Middle East this week at SAMAC's Saudi Arabia's plant, which is expected to reduce exports from the region.
Although the supply cuts have reduced some of the supply length, there is still more than enough material in the market to meet demand.
Unless demand picks up significantly, or there are serious production issues going forward, supply is expected to remain ample for the rest of 2019.
While demand will increase in September, with many players on minimum stocks because of the August holiday period, there is little optimism and diminished confidence for any real improvement for the rest of the year.
Third-quarter MMA prices concluded at €1,995-2,010/tonne FD NWE, a €140/tonne decrease on the low end and a €130/tonne decrease on the high end from the second quarter.
The majority of MMA is polymerised to make homopolymers and copolymers, the largest application being the casting, moulding or extrusion of PMMA or modified polymers.