US Q3 melamine contracts rise 4% on steady demand, snug supply

08 August 2012 19:55  [Source: ICIS news]

US Q3 melamine contracts rise 4% HOUSTON (ICIS)--US melamine contract prices for the third quarter settled at an average increase of 3.5 cents/lb on steady demand and snug supply, according to ICIS on Wednesday.

Contract melamine prices for the third quarter were assessed in a range of 88-101 cents/lb ($1,940-2,227/tonne, €1,571-1,804/tonne), an increase of about 4% from 84.50-97.50 cents/lb in the previous quarter.

The price increase resulted from steady demand for melamine in an environment of snug domestic supplies, higher producer feedstock costs, rising prices in Europe and a lesser amount of melamine available from Asia, sources said.

Sellers began third-quarter contract negotiations looking for increases of up to 8 cents/lb to offset higher input costs for ammonia and urea.

With projected high demand from agriculture for ammonia this autumn, the price of ammonia in the US is expected to hold steady or increase into September and October from its August level of $690/tonne CFR (cost & freight) Tampa.

Looking ahead, market participants project that the demand for melamine in the fourth quarter will remain steady, although seasonally dipping from those users who make materials used in the construction industry.

With overall demand reasonably steady, however, producers are expected to seek another price increase in the next quarter, a source said.

In Europe, third quarter contracts settled at increases of $75-85/tonne, where demand is steady but available supply is limited because of high exported volumes and delayed imports from Trinidad & Tobago, sources said.

($1 = €0.81)

By: Frank Zaworski
+1 713 525 2653

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