Increase in Upstream Costs and Limited Inventory Lead to a Buoyancy in European PMMA Prices

Hamburg, (Germany):  Prices of Polymethyl Methacrylate (PMMA) have risen significantly across the European market during the second week of June 2024, as major producers have implemented PMMA price increases. Additionally, high raw material costs and restricted supply have further supported this upward trend in the regional market. However, demand for PMMA from the downstream segment has remained under pressure amid macroeconomic challenges.

According to the latest data from ChemAnalyst, PMMA prices in the German market have increased by USD 98 per metric ton, following price hikes by Rohm GmbH effective from June 1st, 2024. Furthermore, during the week, feedstock Methyl Methacrylate prices showed an upward trend, contributing to higher production costs for PMMA in the domestic market and leading to an increase in PMMA prices. As a result, PMMA prices FD Hamburg were settled at USD 3450 per MT by the week ending June 14th.

In terms of domestic production, PMMA manufacturing firms have been operating at low rates due to weak downstream demand and economic uncertainties. Moreover, inventory levels of PMMA have been kept limited to meet current downstream demand. However, disruptions at Germany's major ports due to transport worker strikes in Hamburg, Bremerhaven, and Bremen are exacerbating shipping delays, logistical challenges, and inflationary pressures.

Despite these challenges, inquiries for PMMA from the downstream automotive and construction industries have slowed down amidst rising interest rates, higher inflation, and economic stagnation. Germany's construction sector, for instance, remained in contraction in May due to significant declines in overall industry activity and new orders. Nevertheless, these factors have not been sufficient to drive down PMMA prices at the lower end of the domestic market. Additionally, business sentiment among companies in Germany has remained unchanged, with the Ifo Business Climate Index holding steady at 89.3 points in May compared to the previous month, indicating less satisfaction with current business conditions.

Looking ahead, ChemAnalyst anticipates PMMA prices may continue to increase in the European market, driven by expectations of rising raw material prices for MMA. However, recovery in demand from the downstream automotive and construction industries is not expected in the near term amid macroeconomic headwinds. Moreover, Germany, Europe's largest economy, is likely to remain weak following its contraction in 2023, with manufacturing facing challenges from sluggish demand and trade uncertainties amid upcoming US elections, strained relations with China, and geopolitical tensions. Meanwhile, PMMA supply is expected to remain constrained amidst ongoing worker strikes in the regional market.