Europe melamine buyers see no justification for Q3 price increase

26 June 2013 13:09  [Source: ICIS news]

LONDON (ICIS)--Third-quarter melamine contract discussions are in the initial stages, and a number of players deem it too early to give precise price target indications, but it is clear buyers see no justification for a price rise, sources said on Wednesday.

“I was intrigued to hear the €50/tonne target,” one buyer said. “Realistically, there should be a decrease in Q3. The market isn't tight.”

“We think the price will go down quite a lot, even by three digits,” another buyer said. “There is absolutely no reason for an increase.”

The market is awaiting further nominations from suppliers. However, one producer announced last week that it is aiming for a €50/tonne ($66/tonne) price rise, based on low inventory levels in Europe, healthy export demand and on expectations of increased buying interest, following recent flooding in parts of Europe.

“I'm not sure the floods will increase demand very much, or by so much that it’ll lead to higher prices,” the second buyer said. “Customers have had much lower offers than in the second quarter. Looking at demand, honestly it could be better. The demand due to the holiday season in July and August won't be so high, so we don't see any problems in covering the demand.”

It said there are signs that there is more pressure to sell melamine than to buy it. “We see a higher decrease of €150-180/tonne. That is at least our goal.”

A trader said: “Negotiations have started slowly. I do not think the €50/tonne increase is realistic.”

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($1 = €0.76)


By: Helena Strathearn
+44 208 652 3214



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