Hamburg (Germany): In March 2024, Methacrylic Acid prices in Germany witnessed a significant surge, marking a bullish trend across the European market. The prices soared to USD 2049 per MT, representing an increase of USD 98 per MT or 5% compared to the previous month. This sharp uptick was primarily driven by several factors contributing to elevated manufacturing costs and tightened supply dynamics.

One of the key drivers behind the price escalation was the substantial increase in upstream Acetone prices. This surge in Acetone costs, coupled with bullish Crude Oil prices, significantly elevated the manufacturing expenses associated with Methacrylic Acid production. Furthermore, the reduced operating rates of manufacturing firms in the preceding quarters exerted additional supply-side pressure on Methacrylic Acid, contributing to the overall price hike.

Despite a tightening in physical markets driven by seasonal factors and OPEC+ production cuts, the European markets faced challenges stemming from higher interest rates. This impact on purchasing power affected the end-use industries' ability to procure upstream raw materials for Methacrylic Acid production, thereby influencing market dynamics.

On the supply side, Methacrylic Acid availability in Germany remained low to moderate during the period. Although the supply was deemed sufficient to meet downstream demand, previous months' low operating rates constrained supply fundamentals. However, an improvement in economic conditions led to a gradual uptick in manufacturing activities, contributing to stability in the Methacrylic Acid market.

The Eurozone Manufacturing Purchasing Managers' Index (PMI) for March 2024 was revised higher to 46.1 from a preliminary estimate of 45.7. While this indicated a three-month low, it reflected positive changes in suppliers' delivery times and stocks of purchases following the relief of disruptions caused by the Suez Canal issue.

Demand for Methacrylic Acid in the European market, particularly from the paints and coatings industries, remained moderate during the period, ensuring stable market operations. Despite this, market transactions were slower than expected, although industry players remained optimistic about increased output Methacrylic Acid  in the coming year due to improving economic conditions and capacity expansions.

Although manufacturing output had declined for the twelfth consecutive month, the rate of contraction slowed, reaching its lowest point since April 2023. Additionally, new orders of Methacrylic Acid   saw a less pronounced decrease for the fifth consecutive month, indicating signs of recovery in the sector.

Currency fluctuations added to the market uncertainties, with the Euro depreciating by 1.64% against the USD on a weekly basis. Looking ahead, the Methacrylic Acid price trend in Germany for April-June 2024 is forecasted to remain volatile. Active inquiries from downstream industries, limited manufacturing activities, and rising Acetone prices are expected to exert upward pressure on prices. However, decreased regional demand of Methacrylic Acid and stable feedstock prices may offset some of these effects, keeping prices relatively stable.