INSIGHT: Mitsubishi cancels ethylene-based US MMA project amid global glut

HOUSTON (ICIS)–A surge in new methyl methacrylate (MMA) capacity in China will keep utilization rates depressed during the next few years, even with the recent decision by Mitsubishi Chemical to cancel its proposed project in the US.

• Mitsubishi said it cancelled its proposed MMA plant because it could not secure enough long-term commitments from customers.
• The US plant would have been the third featuring Mitsubishi’s Alpha process technology, which uses ethylene, methanol and carbon monoxide (CO) as feedstock.
• Even after Roehm starts up its own ethylene-based MMA plant in the US, the country will have less MMA capacity than at the start of the decade.

FLOOD OF MMA IN CHINA
Since 2020, Chinese MMA capacity has expanded rapidly. By 2028, ICIS expects it will grow by 67% from 2020, adding an extra 1.77 million tonnes/year of capacity. That added capacity exceeds that of North American and Europe combined.

Most of the new capacity in China relies on the acetone cyanohydrin route, although some of the other new plants use the isobutylene path. There is even a sprinkling of ethylene-based plants.

The following chart shows the growth of MMA capacity in China. Figures are in thousands of tonnes/year.

Source: ICIS

MMA capacity has grown faster than demand, and the excess is showing up in depressed operating rates.

Global MMA utilization rates fell to 61% in 2023, and they will remain in the low 60s through 2028, according to the ICIS Supply and Demand Database. From 2010-2019, global MMA utilization rates never fell below 75%.

ROEHM GETS EARLY START ON US MMA PLANT
Roehm is also developing a US MMA plant that will be based on its ethylene technology. The plans from Roehm and Mitsubishi were revealed by ICIS in 2019, and their new plants were intended to replace older ones that relied on acetone.

The following table compares the capacities of the new plants with the ones that would be shut down. Figures are in tonnes/year.

	NEW PLANT	OLD PLANT
Roehm	250,000	160,000
Mitsubishi	350,000	155,000

Source: ICIS

While Mitsubishi continued evaluating its project, Roehm proceeded with construction and broke ground in October 2022. Roehm should start up its new plant this quarter.

Had Mitsubishi and Roehm both proceeded with their plants, the US would have a surplus of MMA, an unappealing prospect in a market with such a large glut of material.

Mitsubishi has closed three plants globally since 2020, and all used the acetone cyanohydrin route. Their 155,000 tonne Beaumont, Texas plant shut in 2021, followed by the 200,000 tonne site in Billingham, UK at the end of 2022 and 110,000 tonnes of capacity in Otake, Japan in 2024.

EXPORTING IN AN OVERSUPPLIED MARKET
The outlook for MMA demand will make it more difficult for the market to grow out of its glut. MMA is used in paints, coatings, adhesives and durable goods like displays and automobiles. These applications are sensitive to higher interest and mortgage rates.

Consumers tend to buy new appliances when they move. Because mortgage rates are high, fewer people are buying homes and purchasing durable goods made of MMA.

Until rates decline and US housing markets recover, many of the major end markets for MMA will remain depressed.

Mitsubishi described future demand growth as stable, which is hardly justification for investing in a world-scale plant. Mitsubishi expects to meet immediate MMA demand with its existing plants.

ELEVATED CONSTRUCTION COSTS
The Mitsubishi project did have one thing going for it. The plant would have relied on ethylene and methanol as feedstock, and the US holds cost advantages for both feedstocks.

The plant’s feedstock advantage could give it an edge in an oversupplied market that predominantly relies on acetone as a feedstock.

The problem is that the US feedstock advantage is becoming offset by rising costs for material and labor.

Chemical plants are competing for parts, labor and materials with a growing number of other industrial and infrastructure projects.

In 2023, several US projects faced large cost overruns. Companies building a polyester plant and a sulfuric acid plant put their projects on hold.

Insight article by Al Greenwood

Thumbnail shows objects made out of polymethyl methacrylate (PMMA), which is made from MMA. Image by Shutterstock.