[Industry Focus]：MMA market analysis in 2024: oversupply, price or correction

in the first half of 2024, the domestic MMA market experienced a complex situation of tight supply and price volatility. On the supply side, frequent plant shutdowns and negative reduction operations have led to low operating loads in the industry, while international plant shutdowns and overhauls have exacerbated the tight supply of domestic MMA in stock. On the demand side, overall market demand growth is limited, despite fluctuations in the operating load of industries such as PMMA and ACR. In this context, MMA prices showed a significant upward trend. As of June 14, the average market price rose by 1651 yuan/ton from the beginning of the year, or 13.03 per cent.

in the first half of 2024, China's MMA production increased significantly compared with the same period last year. Despite frequent maintenance operations, the 335000-ton plant put into production last year and the 150000-ton plant expanded in Chongqing have resumed stable operation one after another, thus increasing the total production capacity. At the same time, the expansion of production in Chongqing has further increased the supply of MMA and provided strong support for the market.

from the perspective of downstream demand, PMMA and acrylic emulsions are the main application areas of MMA. In the first half of 2024, the average operating load of the PMMA industry decreased slightly, while the average operating load of the acrylic emulsion industry increased. The two changes are not synchronized, resulting in a limited overall increase in MMA demand. However, with the gradual recovery of the economy and the steady development of downstream industries, MMA demand is expected to maintain steady growth.

in terms of cost profit, MMA produced by C4 process and ACH process showed a trend of cost decline and gross profit increase in the first half of the year. Among them, the average production cost of C4 MMA decreased slightly, while the average gross profit increased by 121.11. Although the average production cost of ACH MMA increased, the average gross profit also increased by 424.17. This change was mainly due to the wide rise in MMA prices and the limited concessions on the cost side.

in terms of import and export, in the first half of 2024, China's MMA import volume decreased by 25.22 percent year-on-year, while the export volume increased by 72.49 percent year-on-year, and the export volume was nearly four times the import volume. This change is mainly due to the increase in domestic supply and the lack of MMA in stock in the international market. Chinese manufacturers seized the opportunity to expand the number of foreign exports and further increased the export share of MMA.

raw material surface: in the acetone market, special attention should be paid to the arrival of imports in the second half of the year. In the first half of the year, the import volume of acetone was relatively small, and due to the unexpected situation of foreign equipment due to routes and equipment, China's arrival volume was not large. Therefore, we should guard against the concentrated arrival of acetone in the second half of the year, which may have a certain impact on market supply. At the same time, the operation of MIBK and MMA products also need to be closely watched. Both have good earnings in the first half of the year, but whether they can continue will directly affect the valuation of acetone. It is expected that the average price of acetone market in the second half of the year may remain between 7500-9000 yuan/ton.

Supply and demand side: looking forward to the second half of the year, two new sets of MMA devices will be put into production in the domestic MMA market, namely, C2 method 50000 tons/year MMA device of an enterprise in Panjin, Liaoning and ACH method 100000 tons/year MMA device of an enterprise in Fujian, which will increase MMA production capacity by 150000 tons in total. However, in terms of downstream demand, volatility is not expected to be large, and capacity growth on the demand side is slower relative to MMA supply growth.

Price trend: taking into account the raw material side, supply and demand side and domestic and foreign market situation, it is expected that MMA prices in the second half of the year will continue to rise in the first half of the year. On the contrary, as supply increases and demand is relatively stable, prices may gradually fall back to a reasonable range of shocks. It is estimated that the market price of MMA in East China in the second half of the year will be between 12000 and 14000 yuan/ton.

Overall, although the MMA market is facing certain supply pressure, the steady growth of downstream demand and the linkage of domestic and foreign markets will provide strong support for it.

Source: Baichuan Yingfu

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