Our weekly Melamine reports are published for Asia, Europe and the US. Price assessments gathered by our locally based reporters cover spot business in Asia, contract and spot in Europe, and contract only in the US.
The market analysis in the commentary section offers overviews of regional activity, upstream news, production updates, graphs, and any other key factors influencing prices. This independent market intelligence can assist you in making those crucial commercial choices with confidence.
Updated to Q4 2019
Asia melamine prices fell to a record low in Q4 2019 amid a sustained supply glut. The average operating rates of China’s melamine plants went up in Q4 2019 compared with the previous quarter, as most melamine producers opted to produce more melamine due to bearish feedstock urea market. Hence, prices slipped all the way in Q4.
Downstream demand slowed down further with the approach of the year end. Buying interest was low as most end-users and buyers were not keen to keep high inventories towards the year end. China’s exports also fell amid the global economic downturn.
2019 was considered a buyer’s market with successive price decreases every quarter due to oversupply and a mixed demand picture. In November, there was a local production issue, but this did not impact the market significantly due to ample availability characterising the majority of 2019. Imports into Europe from China were lower in 2019 which is said to be giving some supply relief in the oversupplied domestic market.
Demand was mostly unchanged at a low level at the end of the year in the fourth quarter. The construction sector is responsible for the majority of European melamine demand and a slowdown was seen in 2019. Demand slowly reduced towards Christmas as inventories were minimised at year end. The largest consumption is also seen in China where margins and prices have been continually under pressure.
Supply and demand did not change dramatically in the Q4 2019. There were no domestic production issues, and turnaround activity overseas did not adversely impact the flow of imports. The US has been a net importer of melamine since 2015. In addition to domestic supply from Cornerstone Chemical, which is the only domestic melamine producer, the US imported most of its supply from the Netherlands, Trinidad/Tobago, Germany and Japan.
Demand was slow on seasonality and was limited by underperformance in certain sectors amid global economic headwinds. Q4 contracts settled at a decrease. Q1 contract discussions were muted for most of the quarter but are expected to gain momentum after the holidays.
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Melamine was originally manufactured by heating dicyandiamide under pressure.
Melamine was originally manufactured by heating dicyandiamide under pressure. Currently, melamine is produced by the decomposition of urea into cyanic acid and ammonia in an endothermic reaction. Cyanic acid is then polymerised to form melamine and carbon dioxide.
Its most important reaction is that with formaldehyde, forming resinous compounds of high molecular weight. The construction and automotive industries figure high in driving melamine growth. Container and coil coatings, laminates and flame retardant uses have all experienced growth in recent years.
Melamine is used in the production of moulding powder to make dinner ware, coatings in cars, fan coils and appliances. Other uses include adhesive resins, which are used in the making of wood panels for the construction of kitchens, bathrooms, furniture and flooring. Melamine is produced by heating urea, ammonia (NH3) and carbon monoxide, of which the resulting mixture of isocyanic and ammonia reacts over a solid catalyst at about 400ºC.
Melamine is moderately toxic by ingestion and a skin and eye irritant.
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