Europe melamine spot prices fall on weak demand

29 May 2013 16:35  [Source: ICIS news]

LONDON (ICIS)--European melamine spot prices have come down by €50/tonne ($64/tonne) this week on poor demand in a balanced-to-long market, sources said on Wednesday.

The spot range this week is at €1,250-1,350/tonne FD (free delivered) NWE (northwest Europe), but very little business is taking place.

The majority of melamine consumers are covered by their contract volumes, and there is no demand for additional material, despite it being the second quarter and the week that a major producer will enter into an extended shutdown.

The second quarter is usually the healthiest in the European melamine market, supported by increased activity in the end-use construction sector. However, weak macroeconomic conditions, concerns regarding the eurozone economy, and a cold spring have slowed buying interest and sapped consumer confidence.

“I see the demand as pretty low,” one trader said. “I think the producers have high inventories and they are pushing for orders, but demand is weak. This is a realistic view of the market.”

There are a few imports coming into Europe. “Not many imports coming in,” the trader added. “At this moment, with this demand, there is no room for imports.”

One buyer said demand is weak and that it had had no problems in obtaining its required volumes so far this quarter, despite outages.

Demand has dropped by 5-25% compared with levels in the second quarter of 2012.

A seller said last week: “It could hardly be worse.”

It went on to say that demand was more likely to increase than decrease, simply because it is [already] at such a low level.

Melamine is a raw material in wood-adhesive resins and laminates.

($1 = €0.78)

By: Helena Strathearn
+44 208 652 3214

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