Methacrylate Monomers: Market Review


Market Review

Taking a closer look at the markets – September 2014

Report by: Malcolm Kidd, Commercial Director for Methacrylate Monomers EMEA. September 2014.


Demand continues to be good

MMA demand has been good over the last six months; a combined effect of the two main application segments. Seasonal demand for the manufacture of coatings has been largely at, or in some cases, ahead of forecast this year. At the time of writing, it looks as though the season will be prolonged into September and October. Demand from the coatings segment is slightly up on last year, but there has been a definite uplift in certain speciality applications and specific geographic areas. Demand from the pMMA segment experienced an upturn in Q2, which has been sustained through Q3. Demand from the construction sector has returned in some of the healthier economies and this, plus stronger automotive production has resulted in improved demand levels.


Supply chains are being stretched

There have been a large number of planned overhauls globally thus far in 2014, with more to come over the next few months. These overhauls, combined with several unplanned events (including those at our own facilities) have at times tested both local supply chains and the capabilities of global supply. Global supply chains have responded, however, the market has continued to feel tight and to operate with lower than normal inventory levels; and will continue to do so for a period of time. As EMEA continues to be a net importer of MMA, the supply / demand dynamics in the other regions will continue to have an impact on product availability in the region.


MRC / LI continue to invest for the future

Since the last issue of FreeFlow, LI’s new synthetic HCN / ACH production assets in Beaumont, Texas have continued to operate well. The Company has also brought its new MAA asset at the Beaumont site successfully on line. In recent months MRC has made two significant announcements about the roll out of Alpha, the patented technology originally developed and commercialised by LI. The contract for the construction of the second Alpha MMA plant in Saudi Arabia has now been awarded with work on site due to begin in October 2014. MRC has also signed a Memorandum of Understanding with Mitsui & Co. for the establishment of a joint venture in the US that will utilise Alpha technology.



The forecast continues to be for slow but steady demand growth for MMA on average across the EMEA region. The continuing healthy performance of some of the more robust economies in Europe plus the ongoing buoyancy in the Middle East are sustaining demand at good levels and giving hope. The supply side has managed to keep pace with this demand, however, with little new capacity coming on line globally over the next couple of years, it will be an ongoing challenge, particularly if demand from the pMMA segment continues its recent upward trend.

Taking a closer look at the markets – April 2014

Report by: Malcolm Kidd, Commercial Director for Methacrylate Monomers EMEA. April 2014.


EMEA demand pattern becomes clearer

Overall, market demand across the region continues to move forward, building on what proved to be a decent year in 2013. However, there is quite a spread of market conditions within the EMEA region. The economy in many Middle East countries continues to forge ahead with high levels of construction requiring methacrylate-based products. Turkey and South Africa are performing steadily despite the recent challenges to their currencies, and the UK and northern Europe in general are showing a slower but continuous upward trajectory, as a number of countries appear to be putting themselves on a firmer footing. Unfortunately, southern Europe continues to exhibit a high degree of inertia preventing it from regaining previous demand levels.


New business opportunities

The importance of flat screen applications to the MMA / pMMA industry is well known and remains a significant segment for demand, albeit with growth more aligned to GDP. As manufacturers everywhere are seeking ways in which to improve upon lower GDP-based growth, and to differentiate themselves with their product lines, methacrylates and methacrylate-based derivatives and formulations are benefiting. The compatibility of pMMA material with LED lighting is a good example of where there is a huge potential. The use of MMA and MAA in the growing segment of industrial adhesives is another excellent demonstration of the inherent product qualities being used to meet the demands of today’s industry and society. The waterborne revolution in coatings may already have happened to a large extent in Europe, however, there are opportunities to penetrate further with many parts of the EMEA region (and further afield) yet to experience the impact of similar VOC legislation and the solutions that methacrylates can bring. The high cost of styrene is causing some resins manufacturers to re-think formulations given the superior performance of methacrylate-based systems. Manufacturers are also looking to methacrylates as possible alternatives to products that are under pressure from lobby groups, such as Bisphenol A in food contact applications. These are just a few examples that illustrate the widespread use of Methacrylates because of their inherent high-performance properties and it is these characteristics that are making them resilient in the current climate.


Lucite International (LI) capability

Since the last issue of FreeFlow, LI has commissioned the new synthetic HCN / ACH production assets in Beaumont, Texas, USA, which will allow increased MMA production capability at the site. Later this year, LI will increase the capacity of its asset at Caojing, near Shanghai, China. 2014 also sees a major investment programme for LI’s MMA asset in EMEA and other LI assets worldwide; a demonstration of LI’s commitment to all of its capacity and desire to maintain the continuity of supply to our customers.


Cost base

Raw materials prices continue to provide a challenge and MMA manufacturers are currently operating at margins well below industry norms. As a consequence, we have seen some rationalisation and mothballing of assets over the last year. There will be relatively little investment in new methacrylates capacity in the next couple of years, and occupacity levels will increase as demand continues to improve. In the meantime, MRC is progressing with its methacrylates investment programme and the project to deliver the second Alpha technology plant in Saudi Arabia remains on-track.



The use of MMA and its derivatives continues to be of interest particularly where customers are seeking to produce a high performance product with good sustainability credentials. Looking ahead, the forecast is that demand will continue to grow in the EMEA region through 2014, perhaps at a slower rate than in recent times in some of the more traditional segments, but with a number of higher growth markets and some exciting new application areas opening-up.

Taking a closer look at the markets – September 2013

Report by: Malcolm Kidd, Commercial Director for Methacrylate Monomers EMEA. September 2013.


Green shoots?

Amid the almost constant reporting of political and economic turmoil in many countries and regions around the world, there is some more positive news for those who care to look.

The Eurozone is emerging from recession and grew by 0.3% in the second quarter of 2013, slightly ahead of forecast. Construction activity increased by 1%, the fastest rate in over two years, with Germany leading the way with 3.9%. Even Europe’s carmakers are reporting some green shoots of recovery. ‘The worst is over,’ said Roelant de Waard, Head of European Sales at Ford.

The weather has been kind too; for most of us at least!

While the statistics suggest that we have not yet recovered to pre-recession demand levels in many chemicals sectors, including MMA, there is a positive momentum emerging, which is bringing a more encouraging outlook. There is no doubt that recent news coming out of China is not so positive for all of us. However, I think we should be thankful for the regular stream of good news stories and real signs of improvement that are giving us grounds for some optimism here in EMEA.


EMEA demand better than forecast

Market demand has exceeded forecasts and is maintaining an upward trend; and the bottom line is that it is not only due to the magnificent weather we’ve had across most of Europe this summer. After a slow start, the coatings season has progressed from strength to strength and is enjoying a prolonged period of good demand. The pMMA and cast sheet segments have also shown signs of a pickup in activity since the beginning of the year. Margins continue to be a challenge for all of us, but it is encouraging to see that volumes are returning to a healthier position.


LI supply

The last two months have proven to be a testing time for LI and I would like to take this opportunity to thank all of our customers, suppliers and supply chain partners once again for working with us during this difficult period. Fortunately, we were able to draw on the capabilities of the wider LI and MRC group, and it was this combined strength that allowed us to maintain the performance level that we did. These particular issues are behind us now and we have worked to do everything required to return to our normal high level of service.


Cost base

Volatility remains the watch-word. With confidence low and tensions high, unrest in sensitive and strategically important parts of the world continue to have an immediate impact upon crude oil price and, inevitably, on major petrochemical derivatives. At the time of writing, even the contemplation of an armed response in Syria has resulted in a 10%+ increase on a barrel of Brent Crude and the naphtha / propylene chain is reacting swiftly. The relentless pressure on our cost base and the volatility of feedstock prices will continue to present a problem for us all, and is an impediment to growth.



LI is continuing to invest in the industry, with the resumption of full rate operation at our Beaumont plant in Texas, USA expected later this year. There are also other new capacity projects under consideration globally. MRC is continuing with its methacrylates investment programme and the project to deliver the second Alpha technology plant in Saudi Arabia is making good progress.

This year’s general outlook for methacrylates continues to be one of modest but steady growth (recovery). We’ve been helped along by a prolonged, warm summer and higher levels of optimism, which in turn has meant a good season for coatings and other applications where acrylics deliver benefits.


Taking a closer look at the markets – March 2013

Report by: Malcolm Kidd, Business Director for Methacrylate Monomers EMEA. March 2013.

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Here we go again?

As we are almost one quarter of the way through the new year, there is a strong feeling of deja vu in the chemical industry at the moment. It is also now very clear that the surreal market environment that existed for many players during 2010 and part of 2011 was indeed unreal, and that a harsher reality has now set in.

The overall demand for MMA in the EMEA region in 2012 was flat compared to 2011 levels, making it the second successive year where the growth in demand that had been predicted has not materialised. Of course there are differences within the region; between countries and from segment to segment, however, the net result is the same. The challenges being faced in the construction and automotive sectors are well documented and these are taking their toll on a number of areas in the chemical industry including the MMA/pMMA value chain.


Coatings sector looking more positive

On a more positive note, one of the good news stories to come out of 2012 was the increased use of methacrylates and methacrylates-based derivatives in the coatings and adhesives segments of our customer base. The wider coatings segment accounts for approximately 30% of methacrylate demand in EMEA and is estimated by LI to have grown by 1-2% in 2012. The inherent functionalities of methacrylates and their benefits in use are continuously recognised by our customer base, which is utilising them to develop and deliver the high quality coatings products that are required in a wide range of applications for the modern world.

It is at this time of the year that demand from the coatings industry increases significantly to ensure products are available for end consumers during the main application season, which is spring and summer for the northern hemisphere. This year the ‘coatings season’ is being given an additional boost with the biennial European Coatings Show, which is being held in Nuremberg in March. The latest technology advances and marketing campaigns will be in evidence making it an exciting time for us all.


Stable supply

The availability of methacrylates worldwide has been relatively steady over the six months since the previous edition of FreeFlow. The MMA market in Asia has been tighter over this period than it had in the previous six months, but we have recently seen improved reliability of the PTT Asahi Chemical plant in Thailand and the start-up in South Korea of MRC’s 60kte JV operation, Daesan MMA, which was brought on line successfully earlier in Q1.

The MMA supply side in EMEA has also continued to operate on a stable basis over the last six months, with planned maintenance outages being completed to time. Imports to the EMEA region have continued as required to supplement European production. However, it has been noticeable that the volumes from Asia have reduced over this period due to both the lack of availability and the now lower attractiveness of exporting to the EMEA region.


Cost base

Unfortunately the sense of deja vu also extends to the situation on feedstocks. Despite the ‘flat’ feeling across the industry generally, several major chemicals are at historically high prices and are currently continuing on an upward trend. Of greater concern, are some significant ‘fly-ups’ in price on products such as propylene, particularly in the US, which producers cannot absorb. This has forced the industry to respond, causing major volatility in downstream derivatives, and creating another impediment to growth.

Margins have reduced significantly for methacrylate producers over the last 12 months to the point where any increases in production costs have to be recovered immediately. It is therefore of great concern to all players should this type of volatility of raw material prices permeate into Europe.



This year’s general outlook for methacrylates is one of modest but steady growth (recovery) in demand compared to the previous 12 months. However, the seasonality of demand globally, as well as within Europe, will have a notable impact on the supply/demand balance at various points throughout the year, which we should be mindful of as we enter the ‘coatings season’ in Europe.

LI will continue to invest in the industry by supporting customer innovations, further deployment of its proprietary Alpha technology as well as investing in research and development into new, more sustainable routes to its methacrylate products.


Taking a closer look at the markets – September 2012

Report by: Malcolm Kidd, Business Director for Methacrylate Monomers EMEA. September 2012.



‘Volatile’ and ‘uncertain’

These two words capture the state of the European petrochemicals market at the moment, and hence are also very applicable to the methacrylates scene. The characteristics of volatility and uncertainty are making it difficult for both buyers and sellers to plan ahead and to have confidence in the future, even in the short-term. Unfortunately this is a barrier to the recovery and growth that we are all seeking.


Cost base

Fuelled by a fluctuating but ultimately resilient crude oil price, several petrochemicals and their derivatives have experienced record high prices in the last six months; apparently illogical in these subdued economic times. The speed and magnitude of price movement from crude oil, through naphtha, resulting in triple-digit price movements in olefins and their derivatives is a concern for all those involved, and for anyone who is looking to return predictable and satisfactory margins for their business.

At the time of writing, acetone (driven by propylene) is facing a second major price hike in successive months and, with it, is introducing a serious situation for the manufacturers of methacrylate monomers. The other major feedstocks required for methacrylate manufacture in Europe are perhaps less volatile than acetone, but are all currently subject to upward pressure and therefore providing no relief for the cost base. The development of the cost base is now a major factor for producers when setting production rates and planning appropriate levels of inventory.


Stable supply/demand

The MMA supply side in EMEA has operated well thus far in 2012 with planned maintenance events being completed to time. MMA imports from outside the EMEA region required to satisfy demand have been steady and sufficient so far this year. There has not been the extreme tightness in the market that was experienced at times over the past two years. It is also a very different situation from the one we experienced in H2 2011, when inventories had been built up primarily in Asia and, when demand softened in Q3, that product was suddenly looking for a home in the EMEA region. This time manufacturers in all global regions are rightly being more circumspect about increasing their stock levels and are instead seemingly electing to balance plant rates to match demand. In addition, the Euro has weakened by around 10% against the US Dollar making importing into Europe less attractive now than it was in the earlier part of the year; and yielding better news for European exports.

Year to date, it is estimated that MMA demand in EMEA has been 2-3% lower than for the same period in 2011, however, there have been fluctuations. The most significant of these was the major de-stocking that took place in the second half of Q2 as the European chemicals market took a ‘wobble’ and embarked on a rapid programme to deplete inventory in the anticipation of lower prices and in the face of uncertain demand in H2. This had a profound effect on MMA demand for a period of 4-6 weeks, and while demand has largely recovered in July, it did mean a more abrupt end to the coatings season than is normal and a more subdued July/August period than had previously been forecast.

Activity seems to be picking up again in September (perhaps in part a reaction to de-stocking in Q2) and for October but not everyone has confidence beyond that time horizon. It is also clear that after the actions of Q2, the industry is operating with very little product in the supply chain.



The state of the Eurozone economies looks set to continue for a while. In particular, the lower level of activity in the construction and automotive segments across the major markets in Europe is resulting in a lower growth environment for the immediate future. There are pockets of better news around the region but, unfortunately, these are relatively small in comparison.

The major concern remains the high cost base and the apparent disconnect between the prices of major commodity chemicals and the reality of the world economy.

Volatility and uncertainty: it is in times like these that suppliers must work even harder with their customers; to communicate, to understand their needs, and to deliver excellent service. LI will continue to ‘go further’ for all of its customers in EMEA, as it does for those based around the world. We are fully committed to ensuring that we continue to deliver the requirements expected of us.

Taking a closer look at the markets – September 2011

For those of us operating in the world of methacrylates, the first half of 2011 left no-one with the time to pause for breath. The market seemed to continue where it had left off in 2010, and there have been periods where the instantaneous global demand for product has stretched the supply side to the extent that it has had to operate at near 100% occupacity to provide sufficient product.

Now, in Q3, the global economic environment is different and a number of grey clouds have appeared on the horizon, giving cause for concern as to whether the recovery, that appeared to be going so well, is able to continue. In particular, many Eurozone economies are being severely challenged and we are starting to seeing the impact of these macro economic effects on business; our own included.

Demand for MMA during the first half of 2011 was almost 10% higher than for the same period in 2010. This was due to a surge in demand for the manufacture of cast and extruded acrylic sheet and another strong season for the coatings industry, where manufacturers were observed to ramp up production early in Q1 to avoid a repeat of the stock-outs that occurred last year. Demand in the Americas followed a similar trend to Europe and Asia continued to demonstrate its generally strong level of demand until mid Q2.

High demand in Europe had therefore been sustained for a period of over 12 months and at a time when with the industry had not had the opportunity to fully recover its inventory levels from the unplanned production outages in 2010. Availability of MMA has remained very tight in the EMEA region all year despite the local production assets performing well. Indeed Lucite International™s (LI) Cassel works in the UK has achieved its highest ever performance levels over these last 12 months.

The market balance should be better in the second half of the year. There are some major MMA plant outages scheduled, but these will be compensated for by the the combination of a more realistic and sustainable level of demand and improved availability of imports.

Behind the Trends
Demand in Europe has been fuelled largely by the confidence gained from the many successful business performances achieved in 2010. In many instances this has been assisted by Eurozone manufacturers being well placed to export their goods to an Asian economy that, until recently, had not really faltered in its continuous, and strong growth. However the expiry of the various government stimulus packages around the world, and, in particular, the impact of the actions of the Chinese government to slow the growth of their economy have had a noticeable effect. This has also brought the realisation that some of the fundamentals required for sustainable growth had not actually been present, which has had a significant impact on confidence.

Unsurprisingly the methacrylates market has also been affected. Demand for pMMA in Asia has slowed through Q2 and Q3 and the supply/demand balance there has altered, freeing-up some product for export.

Manufacturers had tolerated rather than accepted the rapid and continuous escalation of oil price since Q1 2010 and the impact that it has had on the prices of major petrochemical commodities. However, at the time of writing, the oil price has fallen by 10% and with the outlook being more cautious, there is clearly a trend to reduce inventory levels in the chain to avoid a repeat of Q4 ™08 in case commodity prices plummet.

There has been no significant new MMA capacity brought to the market in the last six months, and at times the current asset base has been stretched to its limits. The start-up of MRC™s Thai MMA No. 2 in Q4 2010 and the more recent re-start of LI™s Beaumont plant in the USA have both continued to go very well.

All eyes are now on the major global economies and the direction in which they will move. The next chapter for the methacrylates industry will inevitably be a consequence of that. Methacrylates have demonstrated themselves to be very robust products and, while not immune to temporary downturns in demand, the impact is dampened compared to other petrochemical derivatives due to the wide diversity of consumption and use, and recovery to healthy demand levels is usually swift. There is still a healthy underlying level of demand resulting from the use of pMMA in flat screen devices and from the continuing trend for many coatings and resins application areas to move away from solvent-based formulations.

Some further new capacity will be added towards the end of 2011 in Asia, which will help the supply side to meet peak demand. After that there is little new capacity to be brought on line for a number of years.

LI™s immediate focus is on the successful completion of the major overhaul event at its Cassel works site in Q4, for which the planning is going well.

Methacrylic Acid
The MAA market has also been very strong globally in the first six months of 2011, and this has been particularly true in EMEA. Unsurprisingly, many of the factors that have determined the MMA market have also been relevant for MAA, however, there has been strong demand for MAA specifically for the production of resins systems, for concrete additives and for oil modifiers.

The availability of MAA in Europe has also been very tight in the first half of 2011, as imports from Asia have not been available due to the simultaneous levels of high demand there. There will be new MAA capacity introduced by MRC during the second half of 2011, which is necessary for the supply side to be able to keep pace with rapidly growing demand.


Taking a closer look at the markets – March 2011

Providing the very highest quality products and services to our customers in the merchant market is what drives the team here at Lucite International (LI). To do this consistently requires us to have a comprehensive understanding of the marketplace and its dynamics. Our world-class business support systems combined with local market intelligence means we are uniquely placed to access reliable data to do just that. As part of our regular review, published both online at, and here in FreeFlow, we share with you the views of Malcolm Kidd, Commercial Director for Monomers in Europe, Middle East and Africa.

2010 Overview
Last year the chemical industry proved to be a year that very few could have anticipated, let alone planned for. Demand for petrochemicals and derivatives not only continued to recover from the low point in Q4 2008, but also grew, in many instances, at near record rates. This came as a result of a return of confidence and good, or at least acceptable margins throughout the chain. This was also true for MMA, where demand in Europe is estimated to have been more than 20% higher in 2010 than it was in the previous year. In particular there was strong consumption from the automotive and industrial coatings segments, and a significant increase in demand for extruded acrylic sheet.

2010 saw little new MMA capacity being brought on line around the world and therefore the reliance was very much on the installed units operating at elevated rates in order to satisfy the higher demand. On a positive note, the Thai MMA2 plant, of which MRC is the major shareholder, was started up in Q4 and is operating well.

After the closure of two MMA plants in Europe during 2009, the EMEA region became a net importer. This was a significant change for the region and the impact was felt almost immediately by the market in Q2. Tight supply/demand balances in Asia and the Americas and the lack of an attractive arbitrage window resulted in very little product being imported into the region. The European supply side encountered disruption through Q2 and Q3 from planned and unplanned outages. The net result was that the European market experienced a reduction in the availability of MMA for a protracted period. At times the situation was very acute.

MMA manufacturing costs up in 2010 from day one
The cost to manufacture MMA increased from the very beginning of 2010 and continued to do so at a significant pace throughout the year. This was driven primarily by the supply/demand dynamics in the basic commodity chemical markets and was not particular to MMA. The combination of a need to recover margins and the prevailing market conditions resulted in MMA prices moving upwards over the course of the year after some degree of inertia in Q1.

Current view of the macro trends
Many of the 2010 themes continue:
* European demand is running ahead of what was an already strong forecast
* Asia remains very tight on MMA, with demand for optical grade pMMA for Light Guide Plates (LGP), TVs and flat screen monitors and coatings (particularly water-borne emulsions) augmenting the already high demand from the other sectors
* Cost of manufacturing MMA continues to rise sharply worldwide
* Supply/demand of MMA remains very tight and supply chains are stretched with low levels of inventory.

As a consequence of these factors, contract prices in Europe moved upwards again in Q1 2011, and spot prices remain extremely volatile and responsive to the changing market conditions.

Driven by the coatings segement, the EMEA region is about to enter what is normally its period of highest demand for MMA. Sources of imports for the EMEA market continue to be relatively limited, and domestic market prices in Asia and the Americas dictate that the cost of attracting this product is significant.

In January, LI successfully re-commissioned its MMA plant in Beaumont, Texas, which had been mothballed since Q4 2008. Although the facility will not initially be operated at its previous nameplate capacity, it is providing welcome additional volume for the global market.

Looking further ahead
Some further new capacity will be added in Asia through 2011, which will help to satisfy the very strong demand that is forecast in the region. This will provide an easing on the supply side, helping to compensate for unplanned outages, however, it is unlikely to lead to a significant increase in the MMA volumes available for export. Assets in Europe must therefore still operate at high occupacity levels to meet the anticipated demand in the EMEA region.

Cost pressures are forecast to intensify over the next few months with oil having broken the $100/bbl level due to strong demand and growing political unrest in parts of the world. Whether this is being driven by supply/demand fundamentals or by investors and speculators, the course set by oil is one that is usually closely followed down the petrochemicals™ chain, and this remains a concern for margins.

For LI, the focus will remain on managing its available MMA volume in the EMEA region and working with customers to best meet their requirements.

A view on Methacrylic Acid
The MAA market exhibits many of the same features as for MMA. Demand is strong in the EMEA region, again particularly at this time of year, and the global mass-balance means that this region has to be almost self-sufficient on supply. In Asia, demand is very strong and is being driven in particular by the concrete additives and oil modifiers segments. There will be some new MAA capacity introduced in H2 2011. Until then the current assets must satisfy the growing demand.


Taking a closer look at the markets – September 2010

In the March 2010 issue of FreeFlow, I outlined my observations of some structural changes to the European MMA market and the challenges these could present for us all in the industry. What I was not aware of was how immediately those challenges would present themselves, and to what extent, looking back, some of the writing was already on the wall; imports into Europe had fallen dramatically making the region almost wholly reliant on its own indigenous production capability and at a time of rising seasonal and underlying demand.

The reduction of imports was due to a combination of the tight supply/demand situation in Asia and the Americas and the European price level relative to other regions, exacerbated by the recent significant weakening in the Euro against the Dollar. These same factors were responsible for the simultaneous drop-off in PMMA (polymer and sheet) imports, which in turn contributed to the increase in demand for MMA in Europe.

In mid Q2 the supply side suffered unplanned production outages on top of some planned maintenance events. The fact that these outages became prolonged and occurred just at the time that demand in Europe was really starting to pick up, resulted in one of the tightest MMA supply/demand scenarios ever.

Demand continued to strengthen through the second half of Q2 and through Q3, although there is a recognised element of seasonality driving this. Unfortunately the unplanned outages on the supply side have continued, and with the additional planned maintenance events that were already scheduled for Q3, it means the same difficult market dynamics have now been in place for five months and will continue for a few months more. Imports are still at minimal levels, inventories have been depleted and supply chains are being stretched considerably.

Manufacturers and sellers of MMA in Europe have been unable to make and source sufficient product to satisfy demand. Very tight market balances in Asia and the Americas have severely restricted the amount of product available for export to Europe and pricing in Europe, despite having stepped forward significantly in the last six months, still does not present a sufficient incentive to an Asian or US producer compared to selling in his own region.

Fortunately Lucite International (LI) has been able to operate its assets at record-breaking production levels during this period. However, this has not been sufficient to cover the shortfall in supply to the market and there has been continuous dialogue and effort through the supply chain to ensure that our core customer base has received continuity of supply to the best of LI&rsquote;s ability. So to all of our customers, I would like to say a sincere &lsquote;thank you&rsquote; for your help and understanding during this period.

Supply in European should be in better health by mid Q4. By this time production should be more stable and stock replenished to more manageable levels. However, the demand outlook in Europe and around the world is still very positive. And it is still worth noting that a large percentage of the MMA customer base has not yet returned to anything like pre-recession demand levels. This, plus the continuing strong growth in demand for pMMA for the manufacture of LCD/LED screens and monitors will maintain a tension on supply.

All of this means that supply/demand in Europe will remain tight for the remainder of 2010 and will become more balanced through 2011 as new capacity is brought on line. Europe will require an ongoing level of imports to satisfy its growing demand as those segments most closely connected to the construction industry continue their recovery from the recession.

MRC/LI – Stronger together
The MRC group had already recognised the MMA global market situation and has been taking steps to improve its supply capability. Start-up of the Thai MMA 2 plant, where MRC is a JV partner, has been delayed by over nine months now, but it is hoped that the plant will commence operation by early 2011.

LI is also planning to re-start its mothballed MMA plant in Beaumont, USA.

With this additional firepower, and through good management of the supply chains, the combined MRC/LI group will be better able to maintain supply and support the growth of our customers.

Methacrylic Acid
The global MAA supply/demand situation changed significantly when LI closed its asset in Belle, USA in Q1 this year and, although regional balances have changed, capacity is now more aligned to total demand. MAA demand in all three regions has remained strong, in particular for use in concrete additives, latexes and water treatment chemicals. The European region is about balanced on MAA but, as for MMA, it is learning to live with fewer assets. Again, unplanned outages have disrupted supply through Q2 and Q3 this year, but not to the same extent as with MMA. The European market remains balanced but with an increasing proportion of available product being consumed internally by integrated producers and no major new capacity due until the later part of 2011, the supply/ demand balance in all three regions is forecast to remain quite tight.


Taking a Closer Look at the Markets – April 2010

Since the last issue of Freeflow in September 2009, demand for MMA has dropped from the high point we were experiencing at the time – which was being driven in part by re-inventorying throughout the chain – to a more ‘normal’ and sustainable level. by the end of q1-10 we are starting to see encouraging signs in some of the downstream markets. the European methacrylates market is also still adjusting to the asset closures that occurred in 2009 and, for the first time, the true impact of these is being felt within the industry supply chain.

‘Demand in Europe is recovering after a slow start to the year and it is predicted to continue to show a modest increase over 2009 levels. The European supply/demand balance has changed since this time last year; Europe is a net importer and its supply chains are more stretched.’

Europe is now reliant on fewer production assets than at this time 12 months ago. As a consequence, imports are a more significant aspect of the region’s mass balance. For the first time the European market has to be able to import product on a regular and sustained basis. This means that worldwide supply and demand balances, European market pricing (relative to the other regions), as well as fluctuating parameters, such as exchange rates, will all have a major part to play in determining the availability of methacrylates in Europe in the future.

Lucite International (LI) has recognised the impact that this change of circumstances will have, and has taken steps to address it. With longer supply chains and lower total inventory being held in the region, there is now, more than ever, a need to work closely and co-operatively with our customers and we are actively seeking this dialogue. In the last six months a new plant in China has started up, but a significant proportion of the MMA capacity that was planned to be introduced or re-introduced this year has suffered setbacks. Most notably there has been a delay to the two new-build projects in Thailand. This has resulted in there being significantly less installed MMA capacity than had originally been planned at this time, which is particularly important given the higher than forecast global demand from the market.

After a disappointing end to 2009 and an overhang of that environment into 2010, demand in Europe has taken a number of months to become properly re-established. The onset of the coatings season has provided a welcome boost to demand levels and it is forecast that this segment will continue the recovery (with the normal seasonal fluctuation) that it has exhibited since Q2 last year. By contrast, demand from the cast and extruded sheet markets has not been so strong since they experienced an up-turn in Q3/early Q4-09 and demand remains at the same level as Q2-09.

The major factor that will determine European methacrylate demand is the rate at which construction projects are resumed. Many projects for domestic dwellings have been re-started after a 12-month hiatus. However, there is real concern about the commercial side of the industry and the funds that governments will have to commit to national infrastructure projects.

Demand in Asia, and in particularly in China, bounced back sharply last year in Q2, and has continued unabated. The support provided by various governments in the region, plus an increased level of confidence, has resulted in Asia being short of product, which means it must import, when it had been predicted to be in a net export position.

Demand continues to be fuelled by pMMA for LED screens, SM for packaging and t-ABS for domestic appliances. In addition, the regional automotive industry seems to be emerging from the doldrums of 12 months ago, at a faster pace than in other parts of the world. After many months of subdued demand, all segments of the North American market have picked up, which is putting additional strain on the limited supply in that region.

Cost Base
The MMA industry in Europe is running significantly behind the curve compared to its feedstock costs. The cost of acetone alone has increased by 23% in 2010, with additional cost pressure being expected from methanol, ammonia and natural gas/energy. From crude oil down, it appears that there will be no relaxation in this trend in the immediate future and price increases for many of the major feedstocks required for methacrylate production have already been announced for Q2-10.

Demand in Europe is recovering after a slow start to the year and it is predicted to continue to show a modest increase over 2009 levels. The European supply/demand balance has changed since this time last year; Europe is a net importer and its supply chains are more stretched. This will become even more apparent as demand returns. LI’s objective therefore is to work constructively with its customer base through what is hopefully an upswing in market demand to ensure cost effective continuity of supply.


Taking a Closer Look at the Markets – September 2009

Since the last issue of FreeFlow in September 2008, the world of MMA has experienced unparalleled change, as has the market for almost every other industrial chemical. As we emerge from that particularly turbulent period, Lucite International (LI) is assessing the state of the ‘new’ marketplace and looking ahead to see what the future will bring.

Difficult times call for tough decisions
Within the last four months, two MMA manufacturers in Europe have made announcements that will result in a combined reduction of 17% in the installed MMA capacity in Europe. This is on top of the closure of both Russian MMA plants in 2008, and represents a significant re-structuring of the industry in a relatively short period of time.

Demand has bounced back
In Q1’09, demand for MMA in EMEA fell to about 65% of the record levels experienced 12 months earlier. By Q2’09, that statistic had improved to about 85%, however, by the end of Q2’08 it was already obvious that a downturn was looming. At the time of writing, during Q3’09, demand for MMA has rebounded to 2007 levels; the result of an improvement in underlying demand as some confidence is restored, and also as a result of re-stocking throughout the downstream chain.

The up-turn in demand form the coatings segment was first observed in early Q2’09 and was due to the traditional seasonal increase in demand for coatings applications through the summer months. This has been primarily for architectural coatings and for wood and metal, but demand from the automotive sector has also been observed to have picked up as a result of the various stimulus packages being implemented by countries around Europe.

Today, there are also signs that demand from the cast and extruded sheet markets is improving. This is possibly the most welcome sign, as it is these segments that are most highly aligned with the construction industry, which suffered the biggest downturn during the first half of this year.

Demand in the Asian market had already started to increase by early Q2’09, driven by pMMA demand for LCD screens; this seems to be being sustained. Demand in the Americas is still subdued, although the market is balanced due to available capacity.

Flexibility is key
Despite these high demand levels in Europe, few players are willing or able to give confident predictions on the outlook for Q4’09, or 2010. It is clear therefore that there will be an ongoing requirement to be flexible and be able to adapt to whatever market environment materialises over the coming period.

New projects coming to market; but what next?
Over the past year, the majority of new plants that were scheduled to start operating have been brought on-line more or less to plan. From LI’s perspective, the pinnacle was the safe and successful start-up of the Alpha 1 plant in Singapore, which is now operating at flowsheet rates. The Daesan MMA plant became operational in Q2 this year and Evonik intends to bring its plant in China on-line later this year. MRC will bring its new plant in Thailand on-line in 2010, but after that, the arrival of new capacity is much less certain.

Projects planned for completion post 2010 would have to have been sanctioned during the last 12 months, which would have been difficult in an environment where chemical companies have been struggling to return the margins required to support new investment. The longer that this period of economic uncertainty lasts, the greater will be the delay to all but the most financially attractive and robust of new-build projects.

Cost base
Feedstock costs remain a concern. While the current elevated demand for MMA is welcomed, the general increased level of demand for base chemicals is a concern for the cost base of manufacturers. The trend of increasing acetone costs through Q1 and Q2 this year against a backdrop of falling MMA prices was unsustainable and meant that the trend had to be reversed; hence MMA prices increased in Q3. However, the relentless rise in acetone costs is continuing through Q3 and methacrylates prices must now be moved upwards again to ensure that manufacture remains profitable.

Summary and outlook
The landscape in Europe is going through a period of significant change, to which we will all have to adapt. The MRC/LI group continues to invest in new, cost-effective capacity, and to bring that capacity to market for its customers via reliable supply chains. The outlook on demand is still unclear and the ongoing challenge for LI will be to remain as flexible and responsive as possible to customer needs in what will inevitably continue to be a dynamic market.


European Methacrylate Market Review – September 2008

Significant Change in the Last Six Months
Much has changed in the MMA industry since the last issue of FreeFlow in April this year. Manufacturing costs have escalated rapidly, production capacity has been closed down – temporarily and permanently, and the demand picture in Europe has adjusted to a new level. All of this has given the methacrylates market in Europe (and globally) a very different feel from that of only a few months ago.

2008 Demand Outlook Is Still Positive
European economic activity has been affected by the slower US economy and the credit crunch, but is still proving to be quite resilient. It is now apparent that Europe underwent a period of de-stocking from the supply chain that took place from mid Q1 to mid Q2. That has now largely been completed and the underlying demand picture is much clearer. While it is true to say that European MMA demand will not grow at the same rate in 2008 as it did in 2007, demand remains healthy and, for the moment, stable (see chart below).

Global MMA demand is still driven by the Asian region. Demand for pMMA for LCDs, MS (methyl styrene) and tABS (transparent ABS) continues to be very strong. Changes to coatings formulations due to new VOC legislation is also contributing a significant and sustained level of demand growth worldwide. In Europe, all sectors have been impacted to some extent by the downturn in the construction industry (primarily housing new builds), but many methacrylate-consuming companies are continuing to invest and are bringing new efficient capacity to the market in 2008 and 2009, which will allow those players to remain competitive in today’s global market.

Production Side Has a Mixed Report
MMA production in Europe has operated well in the first half of 2008, but there have been some significant events more recently that have reduced the overall amount of MMA in circulation in Europe. The two Russian producers ceased operation in Q2 and some Asian producers have reduced operating rates due to soaring prices and availability of feedstocks. This has had a noticeable tightening effect on the MMA supply/demand balance in Europe. In addition, the differing regional movements in raw material prices and MMA prices around the world and the US Dollar strengthening against the Euro means that there is significantly less incentive for US and Asian producers to export into the European region.

In the second half of 2008, there will be a heavy overhaul programme in Asia and a number of major planned overhauls taking place in Europe, including a four week outage at Lucite International’s (LI) Cassel works site in the UK in Q4. These events will further reduce available MMA during this period.

New Build Projects Proceeding
Delays continue to be reported on some new build MMA projects, as the difficult EPC market and soaring construction costs make project completion increasingly challenging. However, at the time of writing this article, pre-commissioning of LI’s Alpha plant in Singapore has been completed and first chemicals have been added.

Feedstock and Energy Costs Are a Major Concern
For the whole of 2008, but particularly through Q2, increases in the costs of raw material and energy have been relentless and in many cases have reached unprecedented levels. Many have not yet peaked and there remains significant volatility and uncertainty in the markets. The net result has been a serious compression in margins for MMA. This is the picture facing MMA producers worldwide, irrespective of technology base.

Through the first half of 2008, MMA prices were increasing in Asia and the US whilst in Europe they were falling. That trend has been reversed in Europe in Q3 but the MMA industry must still strive to return acceptable margins so that in the short term the required volume can be produced and, in the longer term, that investments will be made in the new capacity required to satisfy the world’s continuing healthy growth in MMA demand.

Methacrylic Acid (MMA) Sees Strong Demand Continue
Demand for MAA in Europe continues to be robust. Despite a slump in housing starts in some parts of Europe, the ongoing activity in new commercial build and infrastructure projects is sustaining a very healthy demand for MAA through the use of concrete additives. Demand for MAA via this route is also very strong in Asia and the Middle East where construction continues unabated.

Although figures show the automotive sector to be down in the more traditional geographic areas, demand for automotive coatings in developing countries has increased and hence the level of MAA demand into this segment has been sustained. The demand for MAA for latexes and speciality resins for coatings for industrial applications has also been very strong, due in no small way to the level of investment in chemical and process plants.

All in all 2008 looks to be a good year for MAA demand, and this is forecast to continue. However, MAA faces the same challenges as MMA with regard to feedstock costs and depressed margins, and improving this position will continue to be the number one focus for the business.


European Methacrylate Market Review – April 2008

“MMA demand continues to be robust in the first quarter of 2008 and the outlook for the rest of 2008 is positive, if a little more cautious than at this time 12 months ago.”

Lucite International (LI) has a strong commitment to delivering a reliable and high quality supply service to its customers in the MMA merchant market. This service extends beyond delivering products that meet customers’ needs on time, and in full to ensuring that it adds value wherever it is possible to do so. With this in mind, we are pleased to be able to share our understanding of the MMA market dynamics so that our customers and partners can appreciate the trading conditions we face together. With more than 25% market share and a global spread that encompasses the US, Asia and Europe, we believe that our world-class systems and local market intelligence provide the best possible forecasting and planning tools to underpin effective supply. Here, MMA Business Director, Malcolm Kidd, shares his thoughts on the current market dynamics and outlook for 2008.

Another strong year for growth in MMA demand
Statistics show that 2007 was another strong year for MMA. Global demand increased by over 5% to 2.9mmtes; the highest growth came from Asia with Europe also contributing a strong performance. The major European economies remained buoyant all year and the developing countries within the region, particularly those in Central and Eastern Europe, maintained their rapid expansion. This environment resulted in a total increase in MMA demand for the Europe, Africa and Middle East (EMEA) region of above 4.5% over that of 2006.

2008 outlook is still positive
The impact of the well-publicised slow-down of the US economy, and the squeeze on money lending is not having the same pronounced effect in Europe as in the US. Some reports suggest that the impact in the European region will be dampened compared to the US, however, the influence of the weaker US currency is encouraging imports. Some slower indigenous demand growth is becoming apparent in a few specific areas. MMA demand continues to be robust in the first quarter of 2008 and the outlook for the rest of 2008 is positive, if a little more cautious than at this time 12 months ago.

New build proceeding to plan
New MMA projects continue as planned with the plant in korea coming on-line successfully in November 2007, and the first new plant in Singapore to be commissioned within the next few months, followed by Lucite International’s ‘Alpha 1’ plant early in Q3. The chart above shows the incremental operating capacity added and the global demand growth achieved in the last three years, together with projections for this year and next. NB: Operating capacity is a downward adjustment to nameplate capacity to allow for known operating limits and planned outages.

Interestingly, since 2005, three world-scale plants have been brought on-line and global occupacity has not fallen below 93%. The forecast is that the new capacity that is planned will be required to satisfy the projected level of growth in demand for MMA.

MMA demand strong across the segments
One of the most positive aspects of 2007 and the outlook for 2008 is that MMA demand is growing well in all the major market segments. Use of MMA in LCD technology continues to be a major driving force behind this global growth. Recent announcements from major players in this field outline a commitment to investing many millions of dollars into new manufacturing facilities that will deliver even larger units for the consumer, which further illustrate the confidence in this sector.

Selective sectors are particularly robust
In the last 6 months, major investment announcements in methacrylate-based coatings and resins indicate that the strong growth that has been observed in this segment over the last few years will continue. In the coatings sector, the current wave of consolidation activity is a trend that is being driven by the desire to grow through the promotion of major brands and is resulting in investment in new production capacity. The impact modifiers and processing aids markets continue to move rapidly. New capacity was brought on-line in the EMEA region in Q4 2007 and more is planned for H2 2008. Demand for acrylic sheet for glazing, fabrication and signage had a very healthy 2007 alongside the construction industry resurgence in Europe. Demand continues to be robust in 2008.

MMA margins compressed over last 6 months
There has been no respite in the cost of producing MMA as prices for the major feedstocks have either increased or sky-rocketed in the last six months, whilst selling prices have lagged behind. Cost pressure is a major issue for all technology routes to MMA. Our sincere hope is that feedstock costs will fall through the remainder of 2008, but irrespective, the MMA industry must get to the point that it can generate margins that will reward reinvestment, and hence foster continued growth.



European Methacrylate Market Review – September 2007

With manufacturing, R&D, sales and marketing and support operations in all three main economies, Lucite International (LI) is uniquely placed to provide reliable and up-to-date market data to support its customers and partners in the acrylics industry. Local knowledge and experience is backed by world-class systems to help ensure that the information is an accurate reflection of the climate we face in the MMA industry. As part of a regular quarterly review that is publish both on line here at and in FreeFlow magazine, we hear from Malcolm Kidd, LI’s Commercial Director for Monomers in Europe.

The outlook for Europe remains positive
Over the past 12 months demand for MMA in the Europe, Africa and Middle East (EMEA) region has increased by a healthy 5%. This positive growth trend looks set to continue at a similar rate through 2008 and is attributable to ongoing robust performance of all 15 EU countries’ economies. The rapid improvement in general standard of living within the EU’s developing nations has given an added boost to the average growth figures for MMA.

Strong demand and investment
Sectors showing the strongest demand for MMA over the past 12 months include: polymer sheet, speciality resins and processing aids such as those used for the production of PVC window profiles. The construction boom in the EMEA region has been particularly evident during the last 12-18 months and has resulted in a tremendous pull-through of MMA and other associated monomers. Even more encouraging are the recent announcements from customers of planned new investments over the next two years that will further increase the demand for MMA. Several other major players in the industry are known to be in the advanced stages of evaluating investments in the same time period.

European demand keeping pace with the rest of the world
Asia is undeniably the ‘hot-spot’ for growth in MMA demand, but the recent performance of the European region continues to impress with the first six months of 2007 experiencing the highest ever demand for MMA.

In a global market of approximately 2.9 million tonnes in 2007, the EMEA region will account for almost 25%. In approximately two years time, Asia is predicted to have grown to account for just over half of the world’s demand for MMA. However, EMEA and the Americas are also predicted to have good sustained growth in that period – and without any significant increase in MMA production capacity.


New build keeping pace with demand
Worldwide demand for MMA has grown at an annual average of 4.75% each year over the past 25 years. Over the last 5 years, the growth has been closer to 7%. These figures suggest that new MMA capacity of almost 140kte is required every year to meet the 4.75% increase, or 200kte at the higher growth rate. Relatively little new capacity was added in 2006 and the same scenario seems likely again in 2007, with at least one project being delayed into 2008. Next year will see a number of new plants being commissioned, including LI’s own Alpha 1 plant in Singapore.

Today the MMA industry in Europe is estimated to be operating with an occupacity of >95%, after accounting for planned and unplanned outages. With no significant new capacity scheduled to come on line for at least the next 18 months, the industry will continue to operate at this level, which will provide an ongoing challenge for the supply chains.

No relief from feedstock costs
The cost of producing MMA (irrespective of technology) has stayed high through 2007 and is forecast to continue as such through 2008. The price of crude oil fluctuates, but prices today are 15% higher than 12 months ago and have been as much as 30% higher during this period. Despite high prices, global demand for base commodity chemicals remains strong, resulting in this cost increase being passed down the chemicals chain. For example, in Q3 2007, the acetone price in Europe is the highest it has ever been. LI continues to look to increase its manufacturing efficiency and optimise its supply chains, but 2008 looks set to provide the challenge of another year of high cost environment for producers.

European Methacrylate Market Review – July 2007

Following the successful launch of FreeFlow magazine and our on-line quarterly market analysis in April this year, we are pleased to bring you our latest update. MMA Monomers Commercial Director, Malcolm Kidd, gives his views on the continuing strong demand for MMA and how the market is shaping up as we enter Q3.

Strongest ever European MMA demand
In Europe we have experienced a balanced market with relatively stable pricing for the last two quarters. Since the beginning of this year Europe has experienced a period of strong demand and good supply, despite the inevitable hiccups. We are expecting the strongest merchant demand on record in Europe during Q2. The supply side performed very well in Q1 with only one noticeable outage. However, in Q2 the supply side has experienced a number of planned and un-planned outages in Europe and other regions. As a consequence, we believe that European stock levels were very low at the end of June. These are now recovering slowly, but will not be at a satisfactory level until the end of Q3 at the earliest.

Global Markets move into balance
The major European economies are booming and demand for MMA (and pMMA) is benefiting. Demand from Asia is still very strong. The US market is recovering after experiencing softer conditions in Q1, as indicated by the level of housing starts. As a consequence, the global MMA market is in balance. Asia remains a net importer and is currently satisfied by product shipped from US and Europe. July/August will be a challenging time globally as a number of planned outages in Asia will result in an increased demand from the other two regions – both of which are working on low inventory levels.

Forecast over 5% growth in European demand during 2007
During the past five years growth in MMA demand in Europe has been over 5% per annum. We forecast that this will continue through 2007 and 2008. The acrylic sheet has taken the lead and is running close to maximum capacity. The processing aids segment is also experiencing higher growth rates, fuelled by the active construction market, especially in Russia and FSU countries where sales of PVC windows are experiencing double digit growth. Demand increase in the coatings segment is following GDP levels after experiencing a period of strong growth in the early part of the decade. Demand from the coatings sector was softer in Q1; however in Q2 we have experienced the typical seasonal uplift, even with wet weather across Northern Europe. Indications are that the normal holiday period for manufacturers in July and August will be shorter than in the past. As a consequence, we expect lower stock levels to persist through Q3 and pricing levels to increase.

MAA market tightens
The demand for MAA continues to grow at a healthy rate. Relatively new applications, such as polymer additives for the construction industry, are driving additional demand on top of that from the more traditional sectors. Recent planned and unplanned outages, plus the delayed start-up of a new asset in the US have resulted in a tight market. It is expected that prices will remain firm.

European Methacrylate Market Review – April 2007


Delivering reliably to customers in the MMA merchant market is of the highest priority for Lucite International (LI). We realise just how critical our ability to supply on time and in full is for our partners’ businesses. Achieving consistent supply requires a deep and wide appreciation of the market dynamics and that’s where LI is uniquely placed. With more than 25% market share and a global reach that incorporates all three major geo-economic regions, we believe that our world-class systems and local market intelligence provide the best possible forecasting and planning tools to help us supply effectively. Here, MMA Monomers Commercial Director, Malcolm Kidd, shares his thoughts on the dynamics for 2007 and how they may effect the European market.

MMA stocks will continue to be under pressure
Demand for MMA continues to be strong on the back of some of the best economic conditions we’ve had in Europe for over six years. Areas of strongest growth are associated with the construction industry and include; coatings, baths and processing aids used in the production of PVC profiles for window frames. The supply base is generally performing better than last year, however during Q1 the industry has experienced unplanned interruptions. This, coupled with continuing strong demand, has resulted in European inventory levels falling significantly. During Q2 a couple of European plants will shut down for planned maintenance and we will move into the higher demand period for the coatings industry. All of this means further pressure on European stock levels.

Surging European growth
Surging fourth-quarter growth across the biggest economies saw the eurozone begin 2007 on the back of its strongest expansion for six years. The EU statistical agency said that eurozone GDP rose by 2.7%, its best rate since 2000, with the annual pace of expansion in the forth quarter accelerating to 3.3%, from 2.7% in Q3 2006.

Downstream growth driving MMA demand
The construction industry is a key downstream user of MMA. The demand in this industry is seasonal and associated with economic performance. With strong economic performance from the eurozone economies and moving into periods of higher seasonal activity we expect MMA demand to follow historic trends and demand to increase in Q2.

Performance of European supply base will impact stocks
The European MMA supply base performed relatively poorly for periods in 2006, with most producers experiencing unplanned outages. With continued growth in demand the supply side is being put under constant pressure to deliver and limit further reduction to already low inventories.


Track record of MMA growth set to continue
For the last 25 years global MMA demand has grown at an average of 4.75% per annum, however over the last ten years we have experienced an increase in this growth to ~5%, as Asian demand has grown at ~8% on the back of innovation and regional activity. In the last 5years, since the difficult year in 2001, the Global CAGR has averaged over 6.5%, with Asia topping 10%. Last year (2006) we estimate the global MMA market consumed some 2.75 million tonnes – 1m tonnes more than 10yrs ago – of which >45% was in Asia (36% in 1996). Until recently increases in supply have been through plant up-rates and a limited number of new builds; of which Lucite International has been at the forefront with its first plant in China last year and will follow quickly with a new plant using Alpha technology in Singapore in 2008. Whilst other new plants in Asia are due to come on stream from next year and in 2009 – the total will be challenged by the annual increase in demand. We predict a continuing tight global supply and demand scenario.

MMA growth continues to grow
One of the exciting features of the MMA market is the increasing level of global growth. The leading region is Asia with 10% growth on the back of strong economic activity and new downstream applications. The highest profile new development is the use of pMMA to provide part of the lighting path for LCD screens. In 2006 we estimated that over 110kt of MMA were used in this application and with the development of atmospheric lighting we believe this segment will continue to grow.

Supply is challenged to keep-up with Demand
During the past 12 months two new world scale plants have started in China, including our own plant which is operating at full capacity. Our next plant, using the new Alpha technology process, will start up in Singapore in Q2 2008. As an industry we need this plus the other new build capacities in order to meet the forecast strong demand.


Lucite International committed to support strong growth in European demand
Since 2000, European demand for MMA has grown annually at an average of over 5% with home and construction industry applications being key drivers. It is the intrinsic properties of MMA and its fit into current lifestyle that has driven this growth. Exceptional durability, UV resistance and weatherability make MMA a key monomer in the production of coatings, while flexibility, surface warmth, colours and effects make it an ideal material for bathroom products and contemporary interiors. And as economies continue to prosper, we predict this growth to continue. In Europe MMA production has traditionally exceeded demand, however the extra capacity is declining as the market grows rapidly. Europe saw its last expansion in 2003 and since then we believe output has levelled. During recent years we’ve experienced a number of un-planned supply restrictions. At times, this has resulted in a particularly tight market. We are very much aware of this trend, which is one of the reasons why we continue to invest in new capacity for the merchant market so that we can support its growth in Europe and globally.

European occupacity predicted to reach 90% in 2007
Based on our best view of supply and demand going forward we believe that European occupacity levels will reach in excess of 90% in 2007 and could reach 97% through the next two years.

Methacrylic Acid returns to balance after serious shortages.
Difficulties in the supply of MAA during 2006 were unusual. One European manufacturer experienced a long-term outage and others faced minor interruptions all of which resulted in restricted supply. Since then strong demand in Asia has continued to pull product from Europe and keep pricing firm. Demand for MAA continues to grow in the relatively new application area of construction chemicals but the more mature automotive coatings sector is flat. We view a balanced market for 2007, with the new MAA capacity in the USA supporting downstream growth.

All information or advice provided in this Article is intended to be general in nature and you should not rely on it in connection with the making of any decisions. Lucite International Limited and the companies within the Lucite International group of companies try to ensure that all information provided in this Article is correct at the time of inclusion but does not guarantee the accuracy of such information. Lucite International Limited and the companies within the Lucite International Limited group of companies are not liable for any action you may take as a result of relying on the information or advice within the Article nor for any loss or damage suffered by you arising therefrom.