In each issue of FreeFlow magazine, our business leaders from around the world share their insights into the global methacrylates markets.

Here, Malcolm Kidd, EMEA Monomers Business Director, offers his latest views and analysis (as of January 2021).

Reflecting over the period since the previous market insight, we have certainly learnt a lot; about our customers and how their products are used, and about the dynamics of our industry, our business and ourselves as individuals. There have been some huge challenges – on many fronts – and there are more challenges to come, not just from the pandemic.

Demand – a year of ups and downs, and ups again. The immediate impacts from the response to the emergence of the global pandemic were felt strongly in the EMEA region at first in March, lasting until about June. There was a significant loss of demand due to businesses and consumers being affected by national lockdowns, de-stocking and acting instinctively based on high levels of uncertainty. This saw MMA demand fall by ~20% year-on-year at the lowest point. However, during this period, the requirement for acrylic protection screens emerged to help prevent the transmission of COVID-19 and, in particular, as a requirement to help societies and businesses emerge from lockdown. This brought a new and extremely strong demand which compensated significantly for the fall-off in other sectors, such that demand in Q2 was down ~14% year-on-year and much less than that in Q3.

During the latter half of Q2 and into Q3, as lockdown restrictions eased, but with many activities still restricted, consumer spending picked-up particularly for home projects. This caused a surge in the demand for paints and coatings (exterior and interior) and items for kitchens and bathrooms, and this has continued through Q4 and into 2021. The final segment to emerge from the first lockdown was automotive where demand for acrylics, both as monomers and polymers, has picked up notably since September.

And while the incredibly strong demand for protection screens has been dropping through Q4 in countries that experienced a strong first wave of COVID-19 as they have reached a point of saturation (although a level of ongoing demand can be expected through 2021 at least), it can now be seen that there is stronger demand in countries that are really feeling the impact from second/third waves.

The combined impact through Q4 from all of the sectors where methacrylates are sold resulted in a demand level that was ~15% higher than typical for that quarter. This was also seen globally. Overall, in the EMEA region, MMA demand in 2020 has fallen by ~5% from 2019; and worldwide by ~3%. However, the manner in which we see our customer base responding and recovering is encouraging, and with the continued economic growth in real terms in countries like China, the outlook is that MMA demand will have recovered to 2019 levels by the end of 2021.

Supply side – multiple challenges 2020 has proved to be a turbulent period for methacrylate manufacturers. The arrival of new MMA capacity, around the same time that demand was falling dramatically due to the pandemic, resulted in an extremely volatile and challenging market situation.

When feedstock prices crashed in March/April, such was the impact on MMA that prices fell to unsustainably low levels during Q2. Since then, feedstock prices have risen continuously based on the recovery of crude oil prices. Some feedstocks (like acetone) have also become less available, due to their own supply/demand dynamics, further increasing supply chain issues and costs for some manufacturers. This, plus the strong pick-up in demand globally, has seen prices recover since July, but the outlook is that a tough and challenging market will continue through 2021.

The Cassel site in the UK undertook a planned overhaul event in October, which allowed installation of a number of safety, robustness and efficiency improvement projects that are an important part of the long-term ambitions for the site. A major overhaul is a huge undertaking at any time and the added complexity of ensuring a COVID-19-secure environment required an immense additional effort from the Cassel personnel and contractor organisations. The event was completed safely, to budget and with operations being fully re-established on time. Well done to all concerned.

At the time of writing, we are working through the implications of a new Trade & Co-operation Agreement that the UK has in place with the EU. I am pleased to say that the plans that were put in place for 1 January 2021 have given us a solid starting point and we are now working hard on this with our supply chain partners.

Finally, thank you to our customers for your engagement and commitment through these most difficult of times. The extra level of communication and dialogue through 2020 has been important for all of us, and I hope that you believe that we have tried our best to work with you and that we have met your expectations. I hope that you continue to be able to stay safe, and that your business has weathered the initial economic storm of 2020 and can continue to recover and strengthen through 2021.