26 April 2013 10:04 [Source: ICB]
Second-quarter melamine contract prices in Europe largely rolled over on the low end from the first quarter, because of balanced market conditions, buyers and sellers said on 17 April.
The range has narrowed to €1,420-1,470/tonne ($1,868-1,934/tonne) FD (free delivered) NWE (northwest Europe). Most contracts rolled over or saw minor changes of €10-20/tonne either way. A small number of contracts were agreed with higher price rises or bigger price falls, depending on starting point, but these are not representative of the market.
"Melamine is pretty much a rollover," a producer said. "We've contracted largely at the same prices as Q1."
"The tightness in Q4 and the beginning of Q1 is gone," another producer said. "Demand is similar to Q1, we do not see a real improvement in demand. There was some hope for recovery in the second quarter. The construction business is starting, but it's not a very healthy market."
Demand for melamine in Europe is weak as ongoing concerns surrounding the eurozone debt crisis continue to sap consumer confidence. "It is steady on a relatively low level compared to previous years," one supplier said.
SOFT DEMAND IN SOUTH
Offtake across Europe is flat, but buying interest has been particularly soft in the south of Europe. One seller said: "Big buyers are saying their demand is regular, although in Italy we're hearing demand is actually down 30-40%."
However, some sources said demand in southern Europe is now steady, with one adding: "Demand is better from the south, which is surprising, so hopefully the bottom has been reached there."
Producers had initially targeted hikes of €45-100/tonne on expected supply constraints because of planned outages in the sector.
Another producer said: "With a rollover, we managed to secure the margins as they were. We were very focused on not agreeing to decreases, because margins are the cause of our headaches."
Planned maintenance at OCI Melamine's 150,000 tonne/year melamine plant in Geleen, the Netherlands, began over two weeks ago. It is expected to continue for another week.
Austrian-headquartered Borealis will undergo an extended shutdown from the end of May until the middle of July for the revamp of its Linz facilities.
Zaklady Azotowe Pulawy's Melamine II plant is operating following its planned turnaround, a source from the Polish fertilizer producer said.
"The maintenances mean supply is limited. If customers ask for more material it's simply not possible," one producer explained.
Melamine is combined with formaldehyde to produce melamine formaldehyde resin. End-products include counter tops, dry erase boards, fabrics, glues, housewares, guitar saddles and guitar nuts.
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