Polymethyl Methacrylate (PMMA)
GC Intelligence (London) — The PMMA forecast for 2019 was revised down. Prices during the peak season of Q2 are now forecast to roll over as opposed to increase, while the decreases expected in Q3 and Q4 remain in place. The window of opportunity for buyers to push prices down is Q1, when demand is normally at its weakest. However, demand tends soften also at the end of the year as key downstream markets, such as construction, slow down. Q2 is the strongest period for prices in terms of demand but also costs. MMA prices during this period of the year increase not only because of PMMA demand but also because of demand from the paint industry is strong. The current forecast of a rollover in the next quarter is based on expectations of weak demand and better supply. Overall, the risk factors likely to impact the market in 2019, such as Brexit, China, and the automotive sector, are getting worse. The UK is heading closer to a no deal Brexit. The automotive industry in Europe posted another set of negative data, making the prospect of a recovery less likely. While the trade dispute between China and the US seems to have improved as the US postponed for three months the deadline to impose further tariffs, demand in China remained weak. The country’s automotive sector in fact contracted for the first time in 20 years according to the latest data. As demand softens in Asia, more PMMA is being shipped to Europe, not only from Asia but also from exporters to the region such as the Middle East. The increased supply in Europe placed pressure on prices in Q1 and will most likely continue to do so for the rest of 2019. Therefore, there are no price increases expected during the forecast period to November 2019.
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