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[Industry Focus]：MMA market in the first quarter of narrow fluctuations, the second quarter can usher in a turnaround?

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Half of April has passed. From the perspective of production process, with the limitation of MMA production process by ACH method, new technologies such as vinyl synthesis in China continue to emerge, opening up a new way for the development of MMA industry.
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Analysis of MMA market trend in the first quarter
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source: Longzhong Information

in the first quarter of 2023, MMA showed a narrow fluctuation trend, narrowing the high and low range. In the first quarter, the average price of the secondary market in East China was 10298 yuan/ton, down 2.88 percent and 16.16 percent from the same period last year.; The quarterly highest point is about 10650 yuan/ton, and the quarterly lowest point is about 10000 yuan/ton. The main factor influencing the market trend in the second quarter is the balance between the upfront cost side and the supply and demand side.

Among them, January is the Spring Festival holiday, and the domestic MMA market is running lightly. Returning after the holidays, market holders tentatively rose at the end of the month and got off to a good start after the holidays. In February, the domestic MMA market rose first and then fell. In the first half of the market supply market quotation rose steadily, the terminal has recovered, the mentality is good, only need to follow up a small amount of buying. In the second half of the year, the market part of the holders of positive shipments, negotiations slightly declined. In March, the overall volatility of the domestic MMA market was limited. Some factories were overhauled, the low intention weakened, the market center of gravity rose slightly at the beginning of the month, but demand did not improve significantly, and the market fluctuated little during the month.

MMA supply and demand balance in the first quarter

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source: Longzhong Information
in the first quarter, on the supply side, some factories planned maintenance. Two sets of new energy equipment were put into production in South China. Domestic MMA production increased slightly to 306600 tons, up 4.78 percent month on month. Import dependence remained at a low level, with year-on-year data showing a downward trend. On the demand side, downstream consumption has not changed much and demand is tepid. At the export level, February and March were slightly better than January. In general, the relationship between supply and demand is slightly greater than demand. After the holiday MMA2, March costs were significantly higher than in January, factory cost pressure increased, so the comprehensive cost side and supply and demand side of the change, the first quarter MMA market narrow fluctuations.

Second Quarter Production Forecast
in the second quarter, two proposed enterprises will be put into operation, with an additional capacity of 150000 tons/year, including 100000 tons of ACH technology and 50000 tons of C4 technology. If the new equipment can be put into production smoothly, the design capacity of the domestic MMA industry will reach 2.42 million tons/year, and the progress of each project will continue to be concerned.

MMA生产情况.png Source: Longzhong Information

the domestic MMA industry is expected to produce 316000 tons in the second quarter, up 3.07 percent from the first quarter and 8.29 percent from 2022. Some of the early parking to reduce the burden of enterprises may maintain the status quo, new capacity plans to start production. There are still factories with maintenance expectations, equipment dynamics still need to be concerned. The industry's average capacity utilization rate is expected to reach about 50% in the second quarter, with limited changes from the previous quarter. However, due to the increase in the capacity base, production has risen steadily.

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Source: Longzhong Information

second Quarter Downstream Consumption Forecast

in the second quarter, China's downstream consumption of MMA is expected to reach more than 290000 tons, up 0.83 percent year-on-year and 17 percent year-on-year. The main reasons are: on the one hand, some downstream industries are expected to increase and expand energy; on the other hand, according to the situation in previous years, four downstream industries are in the stage of improving demand in early May.
mma下游消费.png Source: Longzhong Information