In response to the spread of the new crown pneumonia epidemic, isolation and protection panels have been installed in many facilities around the world, which has promoted strong growth in demand for polymethyl methacrylate (PMMA). For methyl methacrylate (MMA) in the industry chain, it has also been positively promoted and demand is bullish.
The latest global monthly market report for acrylates and superabsorbent polymers released by IHS Markit shows that although the overall demand for MMA monomers will still lag behind the level in 2019, the demand for different industries varies greatly. In the United States, MMA used for PMMA sheets continues to rise. PMMA sheet manufacturers have not reported any demand and supply issues. They are running at full capacity to complete orders. Many large retail chains have renovated their stores in the early stages of the epidemic. At present, the main demand for PMMA comes from some smaller retail stores, enterprises and other facilities that need to install barriers.
IHS Markit’s latest forecast is that by the fourth quarter of this year, US demand for PMMA will remain at or close to the current level, and then begin to slow down. The growing demand for commercial construction since May and the slow recovery of the automotive industry in the third quarter supported MMA demand. The US MMA contract price in July rose by US$18/ton, with an average of US$1678/ton.
The situation in Europe is similar. MMA demand for PMMA film/sheet is still strong, especially supported by the increase in demand from the coatings industry in July. Denis Poussin, global director of acrylic resins at IHS Markit, said that PMMA producers in the region have been operating at their maximum capacity, and some polycarbonate production lines have even been transformed into PMMA sheet production lines. The growth in PMMA demand gave birth to “a whole new industry.” A large part of the demand is usually used in the production of automotive lighting equipment, instrument panels, interior accessories and other composites, but the recent spread of the epidemic has caused a tragic decline in demand in automotive-related industries.
“If the increase in PMMA sheet demand continues until the automotive industry recovers, the final MMA demand level may be the same as in 2019. Although sheet demand has rescued the MMA industry, these areas will only make up for the decline in demand in other applications.” Poussin said . Overall, European MMA demand this year may drop by 3% compared to last year.
IHS Markit reports that European MMA manufacturers’ orders have been scheduled to the fourth quarter, with a delivery period of 3 to 4 months. In June, the sharp increase in Asian MMA prices caused China’s PMMA sheet to suspend exports to the European market. However, with the rapid decline in Asian raw material acetone and MMA prices, Asian PMMA sheet exports to Europe should resume. Raw material prices rose further in August and demand remained stable. MMA prices are also expected to rise. In July, the spot price of MMA rose to 1,325 euros/ton (approximately 1,568 US dollars/ton).
According to IHS Markit, in Asia, due to weaker acetone prices and increased supply, China’s MMA market was bearish in July. Prior to this, due to the surge in demand, Asian MMA prices have soared. China’s export demand for PMMA sheets remains healthy. According to the report, China’s Zhejiang Petrochemical 90,000-ton/year MMA unit will be put into production later this year, which also means that supply will increase when demand recovers slowly, which will put pressure on MMA prices for the rest of this year. In addition, demand for PMMA sheets in other parts of Asia is still strong, so integrated MMA and PMMA producers can maintain full capacity operations.
The report pointed out that, compared with MMA producers of acetone raw materials, the production costs of integrated MMA producers based on C4 raw materials in Japan, South Korea and Southeast Asia are more competitive. The downstream PMMA device operates stably and maintains a high load rate. Due to stable PMMA sheet demand, local MMA inventory levels have declined. According to IHS Markit, the demand for PMMA sheets will remain healthy in the third quarter, which will support MMA prices in the region in the short term. The average price of MMA in China in July was estimated to be RMB 10,775/ton (US$1,279/ton), which was RMB 945/ton lower than in June. Poussin said that MMA producers in Asia’s C4 route are very cost-competitive. Compared with European and North American producers, they have a huge cash cost advantage.