27 January 2010 23:59 [Source: ICIS news]
LONDON (ICIS news)--First-quarter European melamine contracts have been agreed up €120-150/tonne ($169-211/tonne) from the previous quarter, in line with low stock levels and sustainable demand, sources confirmed on Wednesday.
Depending on the location, and at what levels fourth-quarter contracts settled, most sources agreed to increases of €120-150/tonne, bringing first-quarter prices to €1,020-1,100/tonne FD (free delivered) NWE (northwest Europe).
“The majority of my big contracts settled at increases of €130-150/tonne,” one producer said.
Other sellers had previously confirmed increases of €130-175/tonne, but added that not all of the high numbers were representative of the NWE market.
Most buyers agreed to slightly lower price rises of €110-150/tonne, with one consumer explaining that it needed the product and therefore had to accept the increases.
Across the chain, players agreed that stock levels were not as low as had previously been forecast in December, but a lack of imports – especially from China, where ongoing tightness had kept prices high – meant that European producers had been in the driving seat during the negotiations.
In addition, it was no secret that producers were trying to regain some of their lost margins ahead of the anticipated imports that were expected to arrive from two new plants due to come on stream this year in Trinidad and Qatar.
Sources said domestic demand was not as strong as most had anticipated in December, which was partly caused by extended shutdowns and partly by higher-than-expected stock levels.
Overall, however, most players agreed that volumes for the first quarter were up from the same period last year but flat compared with the fourth quarter.
Domestic spot prices were expected to go up in line with the first-quarter contracts. But most players agreed that, for the time being, they should be kept stable at €950-1,020/tonne FD NWE.
Import levels were also unchanged at $1,250-1,350/tonne T1 CIF (cost, insurance and freight) European Main Port.
On Wednesday afternoon, Chinese spot prices were assessed stable to soft, as buying resistance grew stronger.
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Asian contract negotiations for the first quarter were still ongoing, with most producers targeting a $200-300/tonne price hike compared with the fourth quarter.
There was no news yet on developments with US melamine contracts.
Fourth-quarter European melamine contracts were agreed at €900-1,050/tonne FD NWE.
($1 = €0.71)
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