European melamine contract price settles down €25/tonne

16 July 2014 23:59 Source:ICIS News

(ICIS)--The European third-quarter melamine contract price has settled at a decrease on the back of strong availability and strong pressure in negotiations from buyers, market sources said on Wednesday.

Prices are now at €1,275-1,325/tonne free delivered (FD) northwest Europe (NWE), down €25/tonne on both ends from the second quarter contract.

Participants attributed the buyers' success in negotiations to ample volumes being available on the market. A couple of players noted that a producer had dropped prices to capture market share in Europe.

The balanced-to-long overall supply situation was not affected by Qatar Melamine Co's unplanned shutdown earlier in the month, with a couple of buyers noting that they are having no problem in getting material from that region.

One buyer said, “We don’t see any lack of availability or problems supplying quantities. The European producers apparently don’t have any problems, and we are seeing imports from Qatar here in Europe.”

The demand situation is considered normal by the majority of players; although one producer said that it sees good demand and anticipates high usage over August and September.

Some contract price decreases of up to €50/tonne have been reported, but were not widely representative.

A producer said, “Supply-demand is rather balanced so this is something that is a bit disappointing, the market is more balanced that the customers’ view but finally we had to agree on a smaller minus [than buyers’ proposals].”

It added, “This is not satisfying for producers- it has to come to an end and definitely for [the fourth quarter] producers [will] have to halt the low prices.”

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By Chris Barker