DSM expects tight melamine supply into 2009

10 September 2008 09:46  [Source: ICIS news]

SINGAPORE (ICIS news)--Dutch melamine producer DSM expects the tight supply of melamine to persist through to 2009 and will keep prices strong, a source close to the company said on Wednesday.

 

The high cost of urea, the major feedstock for melamine production, has been deterring producers to beef up output.

 

"The market may remain tight [in the] fourth quarter and into next year despite having the new Middle East plant coming up,” said the source.

 

Qatar Fertilizer Co (Qafco) is building a 60,000 tonnes/year melamine plant in the Mesaieed, Qatar that is due for completion in the first quarter of next year.

 

DSM expects melamine contract prices to rise as much as $350/tonne to $2,420/tonne in the fourth quarter against the backdrop of Chinese demand picking up and a slight pullback in demand from Europe.

 

 “I think it is too early to say what the outcome of (Q4 contract prices) will be,” the source said when asked whether its projected number will be hit.

 

DSM is the largest producer of melamine, with presence in Indonesia, China and the Netherlands.

 

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By: Leon Toh
+65 6780 4359

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