Laminate Industry Faces Supply Crunch With Bullish Melamine Prices
- 09-Jun-2022 3:39 PM
- Journalist: S. Jayavikraman
Mumbai, India- Since the start of this month, the Laminate market has been surging with increasing cost of their raw material. There has been an unprecedented increase in prices of Formaldehyde and Melamine, creating a supply/demand gap among the downstream ventures.
The industry has also substantially increased fuel prices and transportation, increasing production overhead costs. Logistics constraints and surging transportation costs skyrocketed the prices of Melamine in the regional market.
Indian Laminate Manufacturer Association (ILMA), the representative group of laminate producers in the nation, has surveyed the conditional effect of the increase and issued an advisory to everyone considering the prevailing business sector; so that members can make appropriate choices and reasonable moves.
China, the major exporter of raw materials for Laminate industries, was dragged by every segment of Petrochemicals. Other key factors for the price increase are rising shipping freight costs, antidumping duties on Melamine imports, and constraints on logistics.
“Laminates manufacturers are sandwiched with soaring raw materials along with narrowing profits and sales which resulted in a price revision.” A trusted source in Mumbai confirmed the trading activities.
The manufacturers, distributors, and suppliers are also affected due to the limited supply of Petrochemical from China and have to increase their product prices for the end-user market to sustain their profits.
If we focus on the feedstock urea, the prices remain on the upper end with healthy demand from fertilizer industry.
According to ChemAnalyst, the price of Melamine is expected to increase in the forecast period with strong market sentiments and insufficient product availability. If the prices increase, the Laminate producers will have to shut down their production. Low inventories and deteriorating exports from China to India will create a barrier for downstream ventures and pressure them to increase product prices in their manufacturing units. Operating rate of the ventures is expected to remain affected by the crippling product availability in the regional market.