US Q3 melamine negotiations to begin in June

HOUSTON (ICIS)–Negotiations for Q3 supplies will soon begin in the US melamine market, market participants said on Wednesday.

 Most talks will begin in earnest in mid-June, and some will continue until early July.

At this time it is unclear what prices will do in Q3, market sources said. After settling at an average increase of 6 cents/lb ($132/tonne) in Q1, the majority of melamine contracts for Q2 settled at a price rollover from Q1.

The big news in the market during Q2 has been the status of Cornerstone Chemical’s 75,000 tonne/year plant at Waggaman, Louisiana. Cornerstone has resumed operations following a major, 29-day turnaround, the company said on its website on 19 May.

Originally scheduled for late summer/early fall, Cornerstone pushed forward the planned turnaround in advance of an ammonia plant start up. Cornerstone will use some of that plant’s output for feedstock.

Incitec Pivot Ltd (IPL) is building an $850m ammonia plant that sits on an existing complex run by Cornerstone. Known as WALA, the plant is 97% completed and is on course to start beneficial production in Q3 of this year. Cornerstone will receive a quarter of the unit’s output for melamine and acrylonitrile (ACN) production.

Cornerstone had built up inventories ahead of its planned turnaround primarily by cutting back on exports. The producer’s exports during Q1 were down by 31% from the same quarter a year ago. Additionally, its exports in 2015 were down by 9%, or 3,240 tonnes, from the previous year.

Customers of Cornerstone said that they were unaffected by the turnaround, and that the producer fulfilled all of its contractual obligations while the plant was down.

Cornerstone Chemical is the only melamine producer in the US.