[Organic Chemicals] Understanding the MMA (methyl methacrylate) value chain in one go
Which MMA (methyl methacrylate) production process is more competitive?
I've seen that different production processes lead to big cost gaps for the same chemical, which creates different competitive landscapes. The Chinese MMA market now has nearly six production processes, and all six have been industrialized. In the Chinese market, the competitive situation varies widely from one process to another.
According to what I've found, the mainstream MMA processes are acetone cyanohydrin (ACH), ethylene carbonylation, and isobutylene oxidation (C4). Building on these three, there are also an improved ACH process, a glacial acetic acid process, and processes named after the companies behind them — BASF and Lucite. All six have commercial plants of 10,000 tons/year or more running in China.
One thing worth pointing out: in September 2022, a 10,000-ton-scale coal-based methanol-to-acetic-acid-to-MMA industrial demonstration unit independently developed by the Institute of Process Engineering, Chinese Academy of Sciences, started up successfully and ran steadily, with product meeting spec. This was the world's first coal-based methanol-acetic acid MMA demonstration plant, shifting domestic MMA production from relying entirely on petroleum feedstock to using coal-based feedstock.
I've written before about the MMA value chain — "Understanding the MMA (methyl methacrylate) value chain in one go" — feel free to click through if you're interested.
I've observed that the shift in the competitive landscape has also changed the supply-demand environment for MMA, which has held prices back from running strong. Looking at the past two years of price movement, China's MMA market price has fluctuated in a narrow range, with a high of 14,014 yuan/ton and a low of about 10,000 yuan/ton. As of August 2023, China's MMA market price was 11,500 yuan/ton.
The main downstream product for MMA is PMMA, and most companies develop around the MMA-PMMA chain model. PMMA's market price has been weak and rangebound over the past two years, with a high of 17,560 yuan/ton and a low of 14,625 yuan/ton. As of August 2023, mainstream PMMA prices in China were fluctuating around 14,600 yuan/ton. Note that since domestic PMMA products are mostly mid-to-low-end grades, their price level is lower than the import market.
It's now widely accepted in the industry that different MMA production processes determine the competitiveness of the MMA-PMMA chain. I estimated MMA costs under different processes, past and present, and reached the following conclusions:
First, setting aside acetic acid route MMA plants, the ethylene route has been the most competitive MMA process over the past two years.
According to my data, comparing MMA production costs across different processes in China from 2020 to August 2023, the ethylene route had the lowest cost and the strongest competitiveness.
In 2020, the theoretical cost for ethylene-route MMA was 5,530 yuan/ton, and the average cost for January-July 2023 was only 6,088 yuan/ton.
