22 June 2012 07:34 [Source: ICIS news]
By Junie Lin
BRISBANE (ICIS)--Asian methyl methacrylate (MMA) buyers are eyeing lower prices for July, on falling Chinese domestic MMA values, plunging feedstock prices and rising inventories, market players said on Friday.
June Asian MMA prices were a rollover from May, and buyers said it’s high time to pass on the lower feedstock prices that producers are enjoying.
One of the key feedstock indicators for MMA, naphtha, had dropped to a 21 month low at noon.
Open-spec naphtha was hovering at $699-701/tonne (€559-561/tonne) CFR (cost & freight) Japan, down $6.50/tonne from Thursday, following the global energy loss.
Prices for cargoes more than 500 tonnes were assessed unchanged week on week at $2,230-2,280/tonne CFR SE Asia, while cargoes of 20-300 tonnes were similarly unchanged week on week at $2,250-2,380/tonne CFR SE Asia on 15 June, ICIS data showed.
“I am looking at a 10% price cut from June,” a southeast Asian buyer said. “Any producer who is still asking for a rollover is crazy.”
Another southeast buyer said: ‘Prices should drop, look at ?xml:namespace>
Chinese domestic prices have fallen to this year’s low on Thursday, just before the country closed for a public holiday from 22-24 June, as a result from the snail-paced downstream demand, and bearish sentiment of traders.
Similarly, in south China MMA spot prices also weakened by CNY600-700/tonne
Many Asian consumers and traders are increasingly bearish, saying that the shutdowns and supply cutbacks are no longer enough to support the dwindling market sentiment.
Japanese MMA inventories are rising above the 20,000 tonnes ‘safety mark’, and it’s a clear indication that supply is rising, they added.
Japanese MMA inventories at the end of May had increased by 6,669 tonnes compared to April at 25,861 tonnes, according to official data by Japan Petrochemical Industry Association (JPCA).
Most producers said they are eyeing the market closely now, with many said they are likely to offer a rollover from June.
Some producers also said they are reluctant to drop prices in July, as this will keep MMA margins in the negative region.
"It might be hard to maintain the prices [for July], but we will try first," said a northeast Asian producer.
MMA is polymerised to make homopolymers and copolymers with the largest application being the casting, moulding or extrusion of polymethyl methacrylate (PMMA) or modified polymers.
Other key applications of MMA in
Additional reporting by Monica Ca