Supply and demand in the European melamine market are largely expected to remain balanced during the second quarter, with demand slightly lower than it usually is in the quarter, and planned and unplanned outages limiting supply marginally.
Third-quarter demand is likely to soften and players expect a balanced-to-long position for the market, with downward pressure on pricing from the buying side.
Demand for melamine globally remains stable at a low level. Buying interest is heavily dependent on the strength of GDP, and ongoing economic weakness has slowed purchasing along the supply chain since the second quarter of 2011.
Buyers in Europe expect to see a softening in prices in the third quarter. Suppliers expect prices to remain reasonably in line with second-quarter prices, and see no need for any decreases.
Demand is usually quiet during August, but September is typically healthier and sees more activity in Europe, particularly because of renovations.
The spot market is subdued as the majority of consumers’ volumes are covered by contract.
Market participants in Asia, Europe and the US remain uncertain about the demand outlook and consider recovery dependent on the outcome of the eurozone debt crisis.
Updated to mid-May 2013