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 Q2 2021
Supply was tight in China in the first half of Q2 as there was more buying from outside Asia, on top of regular buying from Asia. Indian buyers were also in the market for Chinese cargoes as they saw supply from elsewhere tighten. As Chinese producers were experiencing good margins after a sharp rise in spot prices from late March to H1 May, many were running their units at high rates.
Demand was stable at the start of Q2 but as spot prices rose significantly from late March to H1 May, some buyers decided to limit buying to reduce their exposure in the spot market. They only returned in late May after prices corrected. The re-emergence of COVID-19 in Asia also dampened demand to a certain extent, namely in India and parts of southeast Asia. Demand from Europe was good in the first half of Q2.
Melamine supply remained tight for most of Q2 due to planned and unplanned issues. Delayed Asian imports added to the limited supply situation, which led to a surge in spot prices. 2Q contracts increased by a triple-digit amount as demand outstripped supply, and rose for the second consecutive quarter.
Melamine demand remained strong during Q2 and suppliers struggled to meet needs. Home improvements during lockdowns supported the DIY sector. Melamine consumers faced long lead times and delays in the delivery of new appliances such as kitchen installations.
US Q2 2021 supply of US melamine remained severely constrained on strong demand and global transportation logistics problems that stem from shutdowns during the height of coronavirus in 2020 and US winter storm Uri, which forced widespread shutdowns of chemical production in the US Gulf Coast. Imports have been delayed or unavailable to domestic customers because of container shortages and vessel space, and US ports faced backlogs partly on truck shortages and overburdened rail transport.
Resurgent US melamine demand during Q2 2021 was stronger than the market was prepared for as the economy largely recovered – in some cases to pre-pandemic levels. Melamine buying interest was driven by robust demand from downstream housewares, toys and construction, despite the latter’s headwinds of high material costs and supply-chain issues. Demand was also strong from the automotive sector, which struggled to meet buying interest because of a shortage of semi-conductors.
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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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