LONDON (ICIS)--The second quarter European melamine contract price has settled at a decrease from the first quarter on the back of improved availability from imports and average to weak demand, sources said on Wednesday.
The range is €1,300-1,350/tonne free delivered (FD) northwest Europe (NWE).
A number of players noted that large quantities of material from outside Europe have become available on the market at low prices, which has allowed buyers to negotiate the contract price down.
Many producers began negotiations aiming for rollovers to small price increases, but were forced to accept price reductions for at least some of their contracts.
One producer, which concluded its negotiations with a reduction from €5-40/tonne after initially aiming for a rollover, said last week: "In South East Asia there is no room for material of any other origin because prices are incredible...the fact that we have seen Japanese material in Europe means that there's no room in Asia for them."
Market participants gave mixed views on demand, with a number of buyers and producers calling it slightly weaker than normal for the time of year, citing causes like low activity in downstream industries like wood panelling.
One buyer, which secured a decrease of roughly €20/tonne in its negotiations, said: "The quantities being offered are higher than demand, but producers are still trying to get margins...for us it's important prices don't increase because it's hard to pass on to customers."
However, a number of producers have disagreed and called demand steady to good, which is in line with expectations for Q2 when sales are normally bolstered by increased activity in downstream industries.
Prices in the high €1,200s/tonne FD NWE to mid-€1,300s/tonne FD NWE were reported by a few buyers that had completed their negotiations.
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