Europe melamine market faces series of outages

LONDON (ICIS)–The European melamine market is braced for a series of planned and unplanned outages that could continue to tighten its balance, sources said. 

There has been a series of maintenance announcements over the past few weeks, with Borealis and Eurochem confirming maintenance in the coming weeks.

These were added to by the announcement this week that Qatar Melamine Company will carry out a partial shutdown of its 60,000 tonne/year Mesaieed plant at the end of May. The partial shutdown is expected to last from 28 May to 12 June, the producer said.

There was some relief to the market balance with OCI Melamine confirming that it is now running both of its Geleen plants at full capacity. The producer had been running its 120,000 tonne/year and 30,000 tonne/year facilities at reduced capacity following a technical problem that affected both lines.

Stocks at the supplier are now depleted because of the fault which came after a planned maintenance stop and a period of good demand, the producer said. The supplier added that it fulfilled its contractual agreements during the fault and will continue to do so throughout the quarter.

The market could tighten further, with talk of a potential production problem at another producer, however this has not been confirmed.

One buyer said that despite the array of outages, its contracts were being fulfilled and it currently had no problems with availability. However, it added that with the turnarounds and technical faults there could be a shortage of availability in the coming weeks.

The availability of product in third quarter is something that has been of interest this week, with a number of sources expecting a tightening of the market balance.

One producer said it expects the market to shorten because of an increase in demand from the US.

However, one European producer has already stated that it would prioritise existing European customers over short-term overseas gain.

The opportunity to increase exports to the US from Europe comes following antidumping legislation last month that virtually priced Chinese and Trinidadian producers out of the US market.

Some market participants had been expecting an increase of Trinidadian material in the European market, however, this has not materialised, according to a couple of sources this week.

The impact of the recent strengthening of the euro against the dollar is not yet said to be influencing trade flows. There is potential for imports from dollar-based regions to increase in tandem with the bounce back of the exchange rate.

However, according to market sources the euro would need to considerably strengthen against the dollar before they would expect a change to recent importing and exporting trends. 

The balance of the market will be determined in line with the success of the numerous maintenance stops carried out in the coming weeks.

Focus article by Katherine Sweeney

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