MMA rebound may not last long

In April, the price of methyl methacrylate (MMA) fell to a record low of 7,000 yuan (ton price, the same below), the production enterprises are in a serious loss state, and the device is operating under load. Recently, with the reduction of production and prices of manufacturers and the replenishment of positions by downstream terminals, the MMA market has ushered in a long-lost rebound. But the author believes that four factors will make this rebound difficult to last.

First, supply is expected to increase. Recently, in the case of high costs and severe losses, domestic MMA manufacturers have increased the ex-factory price to reduce their losses. Therefore, the domestic MMA market also rose slightly, and prices returned to the level of 7,500 yuan. However, Zhejiang Petrochemical's 90,000-ton / year MMA plant, which will be commissioned in mid-to-late April, may aggravate the overall supply of domestic supplies. At that time, the upward pressure on the market will increase, and the MMA rebound strength is obviously insufficient.

Second, demand continued to be sluggish. Affected by the new coronary pneumonia epidemic, the overall sales of the downstream terminal industries such as automobiles and real estate, which are closely related to MMA, are in a downturn. In the first quarter, automobile production and sales fell by 45.2% and 42.4% year-on-year, respectively. In addition, the construction and sales of the paint and real estate industries were also adversely affected by the epidemic. The downturn in the overall production and sales atmosphere of the downstream terminal industries has slowed down the actual orders and sales volume of MMA. In the absence of significant improvement in demand, the MMA market's rising market is not firmly rooted.

Third, it is difficult to export smoothly. With the spread of the epidemic around the world, the demand for foreign MMA is also shrinking, and prices in the international market are weak. In the case of more abundant supply of MMA abroad, the export orders of domestic MMA and its downstream products have been greatly reduced. From January to February, China's MMA exports were only 6,533.46 tons, down 7.84% from the same period last year. After the blockade in India, orders delivered to it by some domestic companies were postponed again, and the pressure on corporate inventories continued to increase, which cast a haze on the MMA market.

Fourth, limited upstream support. From the evening of April 9th, after three days of frequent negotiations, the OPEC + meeting finally reached an agreement: from May 1st, crude oil will be reduced by 9.7 million barrels per day for a period of 2 months. For the shrinking demand caused by the epidemic, the reduction in output is less than expected, and it is difficult to boost the crude oil market. In addition, the current epidemic situation is still in the spread stage, the terminal demand will continue to be impacted, the global economy and the chemical product market are facing greater pressure, and the risk of MMA market turning back is increasing.