Europe melamine buyers shut the door on seller Q2 price hikes

20 March 2014 16:58 Source:ICIS News

LONDON (ICIS)--European melamine buyers are targeting price decreases in the second quarter, amid steady demand in a well-supplied market, sources said on Thursday.

Buyers are pursuing lower prices, adding that they strongly oppose news earlier this week that a couple of producers intend to aim for second-quarter price hikes.

Two buyers said on Thursday that discussions for the second quarter had already begun and it remains their intention to aim for double-digit decreases.

One buyer said it would be purchasing less material in the second quarter than it had done in the first as it is expecting lower end-use consumption in its sector.

Another buyer said: “Demand is quite good actually. We had an increase [in demand] from January to February and again to March. I hope that weather conditions will increase orders with customers and hope business is ok. We don't see any shortage in availability.

"Material is in the market. Demand is 5-10% better compared with Q1 and there is a better general mood in the economics.”

It added that it did not see any reason for price increases. “Our customers want to have lower prices.”

Clearer pricing ideas will emerge next week.

Melamine is a raw material in wood-adhesive resins and laminates.

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By Helena Strathearn