20 April 2011 23:59 [Source: ICIS news]
LONDON (ICIS)--European second-quarter melamine contract prices have fallen by €200/tonne ($286/tonne) from the record high levels of the first quarter on improved availability, reversing the upward trend to resemble fourth quarter values, sources said on Wednesday.
Prices were assessed at €1,430-1,530/tonne FD (free delivered) NWE (northwest Europe), a mere €20/tonne above the low end of the range in the fourth quarter of 2010.
“In general, we are scaling back towards quarter-four pricing,” said a buyer. “Our contracts have decreased by €150-200/tonne,” the buyer said.
“I have settled most of my contracts at a €180-200/tonne decrease,” another buyer said.
Sellers passed various levels of decreases, from €100-€215/tonne depending on the starting points of customers. Actual values were quoted between €1,400-1,550/tonne FD NWE by buyers and sellers, with the majority of business confirmed within the settled range.
As competitively-priced volumes of imported material from Qatar and Trinidad increased and became more regular, buyers pushed for decreases. Following nine months of limited supply in 2010, owing to prolonged and unexpected outages in the European market, prices steadily increased to reach their peak in the first quarter.
Buyers were satisfied with the cost reductions for the second quarter, and expected further decreases in the third quarter.
The spot range moved down €50-100/tonne in the last two weeks to €1,300-1,400/tonne FD NWE. Spot activity was thin as customers had entered April with high inventories, and were reluctant to purchase material before negotiations for second-quarter contracts had concluded.
Offtake was expected to improve after the Easter holidays, and demand was likely to reach a healthy level in May and June, buyers said.
“We will see a certain stabilisation of melamine pricing,” said a trader. “Although, obviously this will depend on supply and demand as well as any production problems which could happen this year,” it added.
Melamine uses include whiteboards, floor tiles, kitchenware, fire retardant fabrics, and commercial filters.
($1 = €0.70)
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