Methacrylic Acid (MAA) prices in Germany are poised for recovery, driven by increased feedstock costs, particularly acetone, which rose by 3%, and a surge in spot crude oil prices during mid-August. This price recovery is expected to be further supported by heightened demand for crude and natural gas, especially from China, as the summer slump ends. Additionally, domestic production and supply adjustments of MAA are influencing market dynamics as supply chains adapt to new production cycles.

The increase in prices of MAA in Germany by 2% (by the mid of August) is primarily attributed to strong demand in the midst of supply constraints. Key consumers of MAA, such as the paints, coatings, automotive, and construction sectors, saw demand outpace supply, leading to price hikes. Inventory replenishment after a period of destocking further intensified demand. Moreover, rising acetone costs, a crucial raw material for MAA production, also drove up production expenses, contributing to the price increases.

Furthermore, the robust performance in the construction and automotive sectors, along with higher exports of MAA-based products like Polymethyl Methacrylate (PMMA), further tightened domestic supply, amplifying the price hike. PMMA prices remained stable to modestly higher in the German market during the first week of August 2024 due to these supply constraints. Reduced domestic output rates and lower import volumes from Asia, where production issues persist, have further tightened supplies.

As of July 29, 2024, the supply of MAA in Germany remains low to moderate. This was impacted by an incident at BASF SE’s Ludwigshafen facility, where an organic solvent leak led to an explosion and fire. The situation was swiftly dealt with, with no environmental contamination, but 15 employees sustained minor injuries. The incident is under thorough investigation. Rising acetone prices have also increased production costs, further driving MAA prices upward. Meanwhile, the Eurozone Manufacturing PMI in July 2024 remained high, indicating a continued decline in manufacturing activity. Despite rising input costs, firms have largely avoided passing these expenses on to clients, keeping the market situation bullish.

As per ChemAnalyst, looking ahead, MAA prices are expected to recover in September and October, driven by rising acetone costs and increased crude oil prices as global demand strengthens post-summer. However, a slight dip is anticipated in November due to seasonal factors and potential raw material price decreases. Prices of MAA are likely to stabilize in December and January, with moderate fluctuations influenced by supply chain adjustments, winter demand patterns, and ongoing economic recovery.