US melamine prices increase by 3 cents/lb for Q3

17 July 2013 23:16  [Source: ICIS news]

US melamine prices rise by 3 cents/lb for Q3HOUSTON (ICIS)--US melamine contracts for product delivered in the third quarter settled up on average by 3 cents/lb ($66 tonne, €50/tonne), market participants said during the week ended 19 July.

The settlements ranged from a rollover to an increase of 5 cents/lb, with the majority in the middle and below the original 5 cent/lb increase nominated by Cornerstone Chemicals, the sole US melamine producer.

The nomination was made in the face of possible supply shortages caused by plant problems and rising demand from increased construction, auto manufacturing and other economic activity.

But imported melamine provided enough replacement product to meet demand, sources said. Supplies remain “comfortable”, buyers said, even as US economic growth is expected to continue.

Supplies had been threatened by production problems, including Cornerstone’s declared force majeure at its Louisiana plant in the second quarter and production slowdowns in The Netherlands during the period. Added to those have been ongoing natural gas curtailments in Trinidad & Tobago that have hobbled production at the Methanol Holdings plant. The curtailments have also hampered the company’s efforts to become an alternate to Cornerstone as a US melamine supplier.

Both Cornerstone and Southern Chemical, the distributor of the product made by Methanol Holdings, have returned to production, but the lapses prompted increased US imports of melamine, up 7% through the first four months of the year over 2012 levels, according to figures from the International Trade Commission (ITC). Most of the replacement increases came from German and Chinese plants. Imports from The Netherlands declined 51% percent for the period.

The natural gas problems are likely to continue to constrain production. The Trinidadian state-owned utility has warned of cutbacks of as much as 40% for September, although the direct affect to producers is likely to be significantly less, according to sources who are familiar with the situation.

US melamine prices are assessed at 83-93 cents/lb for delivery in the third quarter.

($1 = €0.76)

By: Bill Bowen
+1 713 525 2653

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