Europe Q2 melamine contracts settle at increase

18 April 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--Second-quarter European melamine contract prices have risen by €30/tonne ($39/tonne) from the previous quarter on firm feedstock costs, and the need to recover lost margins, sources said on Wednesday.

Prices have been assessed at €1,010–1,090/tonne FD (free delivered) NWE (northwest Europe).

Buyers and sellers largely attributed the hike to the need to recover producers’ lost margins.

European melamine contract prices had been falling since the settlement of the second-quarter contract last year, on good availability and dwindling demand. Competitively-priced imports have also forced prices down. Meanwhile, the costs of natural gas, urea and ammonia have predominately firmed over the past 12 months.

Most producers and consumers said contracts had been agreed at a rollover, and with increases of up to €50/tonne.

Other producers saw higher increases of just above €50/tonne, and up to €70/tonne, with few to no rollovers.

Sources said the upward price pressure would continue, and that third-quarter contracts were likely to increase further. However, buyers said demand remains weak. Although general offtake has picked up, some consumers said their second-quarter demand is lower than in the first quarter.

The spot range is now €915–950/tonne FD NWE, compared with €930–1,000/tonne FD NWE in the first quarter.

Melamine is combined with formaldehyde to produce melamine formaldehyde resin (MF), a durable thermo-setting plastic used in heat-resistant, wipe-clean plastic laminate, and melamine foam. The end-products include counter tops, dry erase boards, fabrics, glues, houseware, guitar saddles, guitar nuts and flame retardants.

($1 = €0.76)

By: Helena Strathearn
+44 208 652 3214

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