Amidst tightening inventories and elevated feedstock prices, US Methyl Methacrylate Prices escalate in late April 2024

Houston, (US): Methyl Methacrylate (MMA) prices ended April 2024 on a firmer note in the US market as feedstock issues took centre stage. Inventories were limited to meet existing downstream demand, further contributing to an upward shift in MMA prices domestically. Additionally, the slowdown in manufacturing activities, brought on by prolonged inflationary pressure coupled with tight financial conditions, has impacted the pricing dynamics of several commodities, including MMA. Moreover, demand for MMA from the downstream derivative industry was moderate this week.

According to ChemAnalyst's latest database, MMA prices increased by USD 45/MT in the domestic market. Unexpectedly, Acetone prices increased this week, resulting in higher production costs for MMA, leading to bullish market sentiments among manufacturers. However, crude oil prices recently corrected downward after an upward trend in the past few weeks, as worries over tension in the Middle East eased and US business activity slightly slowed. The current decline in crude oil prices has had a lukewarm impact on feedstock prices. Additionally, OPEC and its allies have extended production cuts into the second quarter of 2024 as anticipated, consequently impacting oil prices in the near term.

Regarding domestic production, manufacturing firms have still operated at reduced rates amid economic headwinds. Additionally, after expanding in March, economic activity in US manufacturing contracted in the initial quarter of 2024. According to market sources, the Purchasing Manager Index remained below the threshold (i.e., 50), reflecting a contraction in manufacturing activity. Consequently, the overall market supply of MMA remained constrained within the domestic market. Most MMA buyers limited their transactions to lean inventories, opting to replenish them cautiously. However, most buyers scaled back their purchases of MMA, adopting a cautious "wait and see" approach. Actual trade remains largely tepid, as market participants struggle to reach common ground amid a persistent gap between buying and selling indications.

On the demand front, inquiries from downstream Polymethyl Methacrylate (PMMA) were steady, as consumption from end-user automotive, electronics, and construction sectors remained moderate across the domestic market. Most market transactions were based on immediate requirements. Thus, foreseeing tight supply, high production costs, and steady downstream demand, manufacturers raised their prices. As a result, prices of MMA FOB USGC were settled at USD 2220/MT during the week ending April 26th.

Looking ahead, ChemAnalyst expects sentiments for mid-Q2 to be weak in the US MMA market, while economic challenges coupled with seasonal factors paint a bleak demand outlook in downstream segments for the medium term. Furthermore, May transactions are expected to see new drops, but the size of losses may be steadier as long as oil futures remain close to prevailing levels. In the meantime, the supply of MMA is projected to improve as global shipping containers are starting to moderate, and the Panama Canal is expected to increase transits in May.