Polymethyl Methacrylate Prices Surge in the European Market Amid Rising Upstream Costs

After witnessing a bearish rally in the past months, Polymethyl Methacrylate prices have increased in Germany, as major manufacturer Röhm has raised the prices of Polymethyl Methacrylate film, effective 1 September 2023. The cost pressure from feedstock Methyl Methacrylate was sufficient as its prices settled on the higher end in the given time frame. Meanwhile, Brent crude oil prices have increased constantly amid the production cuts from Saudi Arabia and Russia, which has put substantial pressure on the upstream Acetone, and the same can be seen in the feedstock Methyl Methacrylate in the European market. Furthermore, the market players speculate global crude oil prices will increase at the beginning of Q4 in response to the Middle East's military conflict, which will pressurize the prices of several commodities, including Polymethyl Methacrylate.

Conversely, Polymethyl Methacrylate demand from the downstream automotive industry has stabilized after better performance in the previous quarter. The German car registrations were flat in September as sales of battery-electric cars slumped after government incentives for buyers were ended, casting a shadow on the wider car market in Europe's biggest economy. As per the KBA motor transport authority, new car sales in September witnessed a marginal decline of 0.1%, totaling 224,502 units. However, the offtake of Polymethyl Methacrylate from the construction industry has remained lukewarm. As per the sources, the construction manufacturing purchasing manager's index dropped from 41.5 in August to 39.3 in September 2023, reflecting the challenging demand conditions constructors face amid higher borrowing rates and uncertainty among consumers. Market participants estimate that the German construction sector's outlook seems destructive. Investors and homebuyers are unwilling to invest further capital while inflation and interest rates remain high and economic growth remains in the contract zone. This cautious approach affects the construction sector, although it will be insufficient to drive the prices of Polymethyl Methacrylate to the low side.

On the supply front, the availability of finished product of Polymethyl Methacrylate was adequate; as a result, the manufacturing firms were operating at reduced rates as manufacturers hesitated to build up excessive inventories in the domestic market. As a result, prices of Polymethyl Methacrylate were settled at USD 3711/MT with a month-on-month increment of USD 484/MT towards the end of Q3 of 2023. In addition, German plastic supplier Rohm has announced an end of production of Polymethyl Methacrylate multi-walls and corrugated sheets at its local plant in Bad König on 1 April 2024 due to declining sales of the products and the resulting excess capacity. It will relocate operations from its unit Mönch-Kunststofftechnik to German sites in Weiterstadt and Wörth am Main.

According to ChemAnalyst, prices of Polymethyl Methacrylate are anticipated to increase in October 2023 due to further expectations of a rise in feedstock Methyl Methacrylate. Demand from the automotive industry is likely to increase, while inquiries from the construction sector will be lackluster amid the macroeconomic headwinds. Furthermore, the low level of the Rhine River prevents cargo vessels from sailing fully loaded, limiting the material availability in the European market.