Europe Q2 melamine contracts agreed at €1,110-1,150/tonne

21 April 2010 23:59  [Source: ICIS news]

LONDON (ICIS news)--Second quarter Europe melamine contracts were confirmed at €1,110-1,150/tonne ($1,500-1,554/tonne), most players agreed this week. The majority of sources said this reflected increases of €20-60/tonne.

Most players said they had settled at least 65% of their contracts, and added that the outstanding contracts were likely to be agreed at similar values.

“I have settled most contracts at hikes of €50-60/tonne, and real values come to €1,110-1,150/tonne,” a producer said.

Many buyers said they had achieved increases between €20-50/tonne.

One consumer, who settled most of its contracts at hikes of €20-35/tonne, said that the market remained weak in the second quarter. The player explained that domestic material was easily obtainable, and that downstream demand was flat.

Another buyer, who confirmed it had agreed almost of all of its contracts at hikes of €20-30/tonne, said that the size of the increase depended on where first quarter contracts had been settled. The source said that its real values for the second quarter would amount to €1,120/tonne on average.

Most players on the buy side agreed that demand was lacklustre and at best flat compared with the first quarter.

Sellers, however, reported slightly higher numbers. One producer, who confirmed increases of €50-60/tonne for most contracts, said it was currently running at full operating rates, as it had been for most of the year,  but that strong demand would soon lead to a reduction of its spot availability.

Two other sellers re-confirmed their previously announced increases of €50-60/tonne, while one of them had settled outstanding contracts at slightly lower hikes of €40/tonne. Both said that real values came to €1,130-1,150/tonne.

On the basis of the above information, European second quarter melamine values were changed to €1,110-1,150/tonne FD (free delivered) NWE (northwest Europe). The quoted ranges will show an increase of €50-90/tonne, although the real increase from the first quarter was €20-60/tonne, in line with ICIS policy to give precedence to real values instead of deltas.

($1 = €0.74)

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By: Madelon Ten Cate
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