After Indiferent August, European PMMA Prices to Skyrocket in September 2023

In August 2023, the German market witnessed a persistently bearish trend in the prices of Polymethyl Methacrylate (PMMA). This can be attributed to the presence of weak upstream values and an abundant supply of the product. The German market has witnessed a drop in demand, declining output rates, and competitive prices from the Asian market, culminating in an underwhelming performance of the polymer industry. The outputs of intermediate and durable goods have significantly dropped, which stalled the demand for polymers, including PMMA. Furthermore, the construction industry's performance has been sluggish in the last and ongoing quarters, and the same can be noticed in the decrease in construction output. On the other hand, Rohm, a major producer of PMMA, has planned to increase its PMMA-based film prices by approximately 23%, effective from 1 September 2023.

Regarding domestic production, the manufacturing firms operated at reduced rates as demand from the end-user market had not fully recovered. The availability of the finished stock of PMMA was adequate to cater to overall downstream demand. In the meantime, the imports of PMMA into the European market on key ARA ports have been ample, with highly competitive prices further pressuring production amid weak demand dynamics. According to the Association of German Chambers of Industry and Commerce, the German market has been gripped with escalating labor shortages, leading to extreme market challenges. Overall, the movement of finished goods of PMMA was unimpeded, and freight charges were relatively low. As per the market sources, Europe's largest port, Hamburg, experienced a notable 11.7 percent decrease in containers throughout the first half of this year. Thus, with reduced global trade volumes, German container shipping firm Hapag-Lloyd reported a first-half net profit of 2.9 billion euros ($3.18 billion) in 2023, marking a 67% decline compared to the previous year.

On the demand front, the pace of inquiries originating from construction industries remained subdued, and market transactions were relatively low, which weighed down the prices of PMMA in the domestic market. As per the sources, the construction Purchasing Manager Index (PMI) declined from 43.5 in July to 43.4 in August 2023, indicating a contraction in new orders. However, despite the firm inflationary pressure and high interest, there has been a resurgence in inquiries from the automotive sector, picking up steam following the recent holiday period in Europe. Still, it didn't lead to an increase in the price realizations of PMMA. According to the data reported by the European Automobile Manufacturers' Association (ACEA), in the period spanning from January to July 2023, there was a notable and significant growth of 17.6% in new EU car registrations, reaching a total of 6.3 million units. This growth is a positive sign of recovery for the European automotive industry, which is grappling with supply disruptions due to the pandemic. Conversely, it's important to note that year-to-date volumes are still 22% lower than in 2019. Thus, as a result, PMMA General Purpose FD Hamburg prices were settled at USD 3227/MT with a month-on-month declination of 4.5% during August 2023.

According to ChemAnalyst, prices of PMMA are anticipated to increase in the forthcoming months due to high upstream values. The demand from the downstream automotive and construction sector is anticipated to increase, which might positively impact the prices of PMMA in the European market.