Market participants pointed out that global demand for methyl methacrylate (PMMA) and methyl methacrylate (MMA) has slowed significantly due to coVID-19 and it may take two years to recover to pre-crisis levels.
PMMA: Demand may decrease by 13%
PMMA demand dropped sharply in the first quarter since the outbreak. Closures in many Parts of Asia, Europe and the United States have hit the already weak auto industry (estimated to be down 30 to 40 percent year on year) and construction (estimated to be down 8 to 10 percent), all of which use PMMA heavily.
Major applications of PMMA include construction, automotive and electronic products. Global DEMAND for PMMA in 2019 is about 2 million tonnes, with Asia accounting for 58%, followed by North America with 19% and Europe with 18%. Global DEMAND for PMMA is expected to fall by 13% this year as a result of the outbreak. Global PMMA demand is expected to fall further in the second quarter of this year as the blockade in some countries has continued for the past two months, with little sign of a modest recovery until July.
Global PMMA demand is expected to grow at an annual rate of 2.4 per cent by 2030, with Asian markets continuing to drive global demand growth at 3.2 per cent. Future demand growth will be driven by industries such as automobiles, construction and LED flat-screen televisions, as well as new applications such as 5G mobile phones, solar power and lithium ion batteries. On the supply side, this year's capacity contraction also shows that the demand side is not giving way, and growth is expected to resume in 2021-2022.
MMA: A full recovery in the next two years
ICIS expects a full recovery in MMA demand within two years as social life returns to normal, with strong growth of 10 per cent in 2021 and a further 7 per cent in 2022. Global MMA demand is expected to continue to grow at an average annual rate of 2.7 per cent by 2030, compared with an average of 3.7 per cent in Asia. On the supply side, Asia is the largest production region. In 2019, Asia accounted for 56% of global MMA production; This was followed by North America with 20% and Europe with 15%.
PMMA is produced by the polymerization of MMA monomers and accounts for about 56% of the global MMA demand. In addition to producing PMMA resins, MMA is also used to produce other methacrylate monomers and in combination with other monomers to produce coating resins with special properties for residential, road marking and industrial coatings, powder coatings and ink production.
MMA production of acetone cyanohydrin, isobutene or ethylene raw materials three technology routes. MMA production process routes vary from region to region depending on raw material cost and availability. The acetone cyanohydrin route is mainly used in North America and Europe, while both acetone cyanohydrin and isobutene routes are used in Northeast Asia. China is more to use acetone cyanohydrin process technology, Japan is to isobutene route. The isobutene route is mainly used in other parts of Asia. The ETHYLENE MMA process is a new route developed in recent years. Currently, there are three plants around the world using the ethylene technology route, including one in Germany using BASF technology and two in Singapore and Saudi Arabia using Lucite's Alpha process technology.
The Alpha process technology was analyzed to be the most cost-effective. The new Saudi Methacrylate Company (SAMAC), a joint venture between Mitsubishi Chemical (MCC) and SABIC, will open in Saudi Arabia in 2018 and save about 40 per cent on production costs, the producers said.
There will also be several new MMA projects in the US and China over the next four years. Two new MMA units of vinyl are expected to be installed in the United States in 2023-2024, taking advantage of cheap local materials. In China, several MMA units will be built using acetone cyanohydrin technology, with most of the new capacity being integrated with large refinery expansion projects. But based on current market conditions, these projects may be delayed.
Acetone phenol: interacceptor effect
The production route of acetone cyanohydrin of MMA is the most mature technology route with acetone as raw material and phenol as by-product. Production of 1 ton phenol will produce 0.62 tons of acetone by side. As a result, global supply and demand for the two products are intertwined. In addition to MMA, acetone is also used to produce solvents such as bisphenol A(BPA) and isopropanol (IPA) and methyl isobutyl ketone (MIBK).
In 2019, the global demand for acetone will reach 7.4 million tons, among which Asia is the main consumption region, accounting for about 52% of the global consumption, and North America and Europe together account for about 42% of the global consumption. Global demand for phenol in 2019 is about 11.7m tonnes, with Asia accounting for 58%, followed by Europe with 20% and North America with 16%. Demand for acetone and phenol has grown at an average annual rate of 3.4% since 2015, mainly driven by bisphenol A and strong growth in the Asian market.
Acetone applications in PMMA and MMA industries are expected to recover within two years, with 9% growth in 2021 and another 7% growth in 2022. Global demand for acetone and phenol is expected to continue to grow at an annual rate of 2.2 per cent through 2030, with Asia remaining the driver.