Polymethyl Methacrylate Prices Face Continued Decline in European Market

Hamburg (Germany): Since the beginning of November 2023, prices of Polymethyl Methacrylate (PMMA) have experienced a downturn across the European market and are expected to remain bearish in the upcoming week. The low-cost support from feedstock has contributed to the decline in PMMA prices in the regional market. Subdued downstream demand, impending regulations, labor unrest, and higher interest rates have been identified as the primary factors impeding the market recovery of PMMA.

According to the ChemAnalyst database, PMMA prices have witnessed a decrease of USD 149/MT in the German market. The cost pressure from feedstock Methyl Methacrylate was limited on PMMA as its prices settled on the lower end during the given time frame. This has led to bearish market sentiments among PMMA manufacturers. Additionally, manufacturing firms were operating at low rates to maintain supply and demand dynamics. Moreover, industrial activities in the German market were further deteriorated, as indicated by contracting Purchasing Manager Index data.

On the other side, the Federal Statistics Office reported an unexpected drop in German exports in October, decreasing by 0.2% compared to the previous month. Imports also declined by 1.2% month-on-month, indicating sluggish demand in the European market. Overall, material availability was abundant to cater to the downstream demand, further weakening PMMA prices.

On the demand front, inquiries from the downstream construction industry remained tepid, with limited instances of new orders reported by market players. The Germany Construction Purchasing Manager Index (PMI) dropped from 38.3 in October to 36.2 in November 2023, indicating that the construction sector remains in recession, with activity fading sharply across all segments, particularly housing projects. Demand from the automotive industry has also been observed on the lower end, with a 5.7% decrease in new car sales in Germany during November 2023.

Looking ahead to the last quarter of 2023, market players anticipate these bearish factors to persist, clouding the near-term outlook for PMMA prices. The demand for PMMA from the downstream industry, notably construction and automotive, is not projected to surge until the first quarter of 2024 due to the off-season lull. German business morale declined more than expected in December, adding to recent evidence that the Eurozone's largest economy could contract in the coming months. Feedstock Methyl Methacrylate prices might decrease, resulting in lower costs and weaker sentiment. Manufacturers are also observed to be more inclined towards releasing existing inventories, as December is typically known as the destocking season. Meanwhile, operating rates are anticipated to remain low, and industrial production might stay in the contraction zone.