Sumitomo Chemical Announces Closure of Two MMA and PMMA Production Lines

Sumitomo Chemical Co., Ltd. has announced the closure of two out of three production lines for Methyl Methacrylate (MMA) monomer and Polymethyl Methacrylate (PMMA) at its Singapore site. The decision will lead to an approximate 80% reduction in MMA production capacity and a 70% reduction in PMMA production capacity at the Singapore facility.

The shutdown of these production lines will significantly impact the availability of MMA and PMMA, particularly in Asia. MMA monomer is a key raw material used in the production of PMMA as well as coatings, adhesives, and various plastic products. PMMA, known for its high transparency, weather resistance, and aesthetic qualities, is used in industries such as automotive, electronics, and construction, including applications like automotive taillights, signage, aquarium tanks, and optical components for liquid crystal displays (LCDs). This sudden drop in production will eventually affect the production cost for these commodities too, although for a short term only.

With the reduction of production capacity by such a large percentage in Singapore, a major production hub, the supply of both MMA and PMMA is expected to tighten significantly, especially in the short term. On the other hand, even though the markets have shown signs of recovery after a period of slowdown, supply chain disruptions could occur as a result of this substantial reduction in production capacity.

The significant reduction in production capacity is expected to push MMA and PMMA prices higher for a short term, particularly in Asia, where demand is still recovering. As supply tightens due to the plant closures, traders and manufacturers will likely have room to raise prices which have already been inching towards the higher end since the past two months. In the short term, price increases could be pronounced due to the sudden drop in supply, especially for general-purpose PMMA products. Additionally, in the year 2024, the demand for PMMA and MMA has been moderate and showed signs of recovery in 2023, the loss of a substantial portion of production capacity from a key player like Sumitomo Chemical will have a much more pronounced effect on prices. This effect may be exacerbated by potential supply chain delays, such as the time required for other producers to ramp up production or secure alternative supply channels. Further, the change is not only limited to the PMMA and MMA markets and can further extend upto the downstream industries in the long term, which at present are themselves planning to expand their production volumes.