Texas (USA): In the last few weeks, the USA's Meth Acrylic Acid (MAA) market experienced a slight price increase, with prices reaching USD 2370 per metric ton (MT) on an FOB USGC basis, reflecting a rise of USD 30/MT or 1.3% compared to the previous month. This upward trend was driven by heightened demand and constrained supply.

Demand for MAA surged, particularly in the paints and coatings industry, which saw a seasonal spike due to favorable weather conditions and increased residential, commercial, and infrastructure painting projects. The automotive sector also significantly contributed to the demand surge, driven by higher production levels requiring more MAA for auto parts and coatings. Additionally, increased exports of MAA to Belgium, India, Canada, and Mexico tightened domestic supply, putting upward pressure on prices.

As demand approached the limits of domestic production capacity, supply constraints intensified. The cost of acetone, a key raw material for MAA, rose by 3% in May due to increasing crude oil prices and supply chain challenges, further impacting MAA production costs. The United States Automotive Paints and Coatings market, projected to grow robustly from 2022 to 2028, also influenced MAA demand. PPG's announcement of a USD 300 million investment to build a new manufacturing facility in Tennessee underscored efforts to meet this rising demand.

Market uncertainty persisted with Brent crude oil prices at USD 84.23 per barrel, compared to USD 79.83 for WTI oil, reflecting weak demand and ample supply. In response to rising demand and supply constraints, PPG announced plans to construct a new 250,000-square-foot manufacturing plant in Loudon County, Tennessee. This facility, PPG’s first new U.S. manufacturing plant in over 15 years, will initially produce paints and coatings for the automotive industry and other industrial segments. Construction is slated to begin in August 2024, with completion expected by 2026.

PPG’s strategic investments also included enhancing existing facilities in Cleveland, Ohio, and San Juan Del Rio, Mexico, aiming to boost manufacturing efficiencies and expand capabilities for sustainable solutions like waterborne coatings. This growth initiative highlighted PPG’s commitment to addressing supply challenges while maintaining consistent capital investment levels.

Looking ahead, potential supply chain disruptions and increased demand from the automotive and paints sectors are anticipated to influence MAA pricing. While advancements in technology and expanded production capacities may alleviate upward price pressures, fluctuations in crude oil prices and energy costs could impact MAA production costs and market prices in the near term. Overall, the outlook for the USA's MAA market suggests ongoing price volatility shaped by broader economic and environmental factors.