MMA Market update

The MMA market currently sees a shift in global dynamics with prices surging in China in the last weeks. While low MMA price levels in China have put additional pressure on European prices for the last 2 years, this trend has now reversed. There are several reasons driving this new structural development of the MMA market.

The MMA market has been very volatile in the last years. The situation pre-2017 was not sustainable with price levels clearly below industry reinvestment levels causing a series of unplanned shutdowns and significant shortages. Since early 2019, the market has seen a price normalization due to weaker demand, higher plant availability and new capacities. However, recent price drops in Asia and Europe have threatened again sustainable operations of the industry and continuous investments into assets and supply chains.

Month of May clearly marks a turning point in global dynamics with MMA spot prices in China having increased >50% over the month according to several public sources. This is mainly driven by a significant increase in feedstock prices, the rebound of crude oil prices, limited MMA production output and a recovery of MMA demand after Covid-19 lockdown.

The global acetone market is currently very tight. Acetone production output is reported to be significantly reduced due to low phenol production largely caused by a fundamentally subdued automotive and construction industry. At the same time, acetone demand was supported by strong isopropanol (IPA) conversion. This has led to a significant acetone price increase in China, followed also by other regions. Acetone shortage and reduced run rates of Acrylonitrile plants providing HCN for MMA production put additional stress on MMA availability.

Furthermore, a stronger than expected MMA demand for clear PMMA sheets compensating weaker automotive production supports robust MMA price levels.

 

Sources: ICIS, IHS, Röhm market information