May 10, 2019May 11, 2019 mcwsi
Are the days of monthly acrylic price creep behind us? Are we entering a period of regular price drops? Will price stability level the playing field and reduce the risks of pricing shenanigans? Here we are, one year after our 2018 Global MMA Roller Coaster assessment considering the impact of a reverse pricing trajectory that is challenging purchasing and marketing managers throughout the supply chain.
MMA prices (methyl methacrylate, the raw material used to produce a wide range of products distributed by IAPD members) have declined about 25% since their 2018 peak levels. Some distributors are enjoying richer profit margins while others are losing market share to aggressive players betting the decline will continue.
In short, soft demand, over supply of MMA and the possible threat of trade war tariffs at most levels of the supply chain have played a part in the current trends. Since the 1st Qtr ’19, prices in China have not decreased further indicating some stability. The South East Asian markets, however, continue to show weakness that point to further declines. In fact, we anticipate another price drop in May as South East Asian MMA demand is still oversupplied.
While stocks and output seem to have completed the needed adjustments during the 1st Qtr, the overall softer market does not warrant any price rebound. Any further price drops should not reach the magnitude of the previous quarter. We have probably hit bottom and any China price increase will be offset by other markets.
In the U.S., fires at some Lucite tanks will disrupt domestic supply. The same situation is affecting Brazil. Once those suppliers replenish, and barring any further unforeseen events, prices should remain level through the end of the year.
MARGACIPTA, Asia’s largest cell cast manufacturer, closely monitors MMA prices on a regular basis in order to provide our clients with the latest pricing data. Keep in touch with us or your sales reps as you manage your inventory positions and make smarter purchasing and marketing decisions possible.
Acrylic, MMA Acrylic, Asia, Global MMA, internatiional, MMA, pricing
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