For the Quarter Ending March 2022
North America
In Q1 2022, Melamine market was impacted by logistics issues, expanded production cost and rising contract costs. US melamine providers grappled with unexpected shift in urea costs and lower production rates because of Natural gas cuts in USA. Flooding Natural gas and ammonia costs unequivocally affected downstream Melamine cost. In value terms, Melamine creation fell in this quarter with supply constraints. On 15th March, Yara Internationals announced a cut at its production of downstream Urea and Ammonia which brought about cost climb. In this quarter, the cost of Melamine surged by 8% as compared to previous quarter. The demand of Melamine in wood and laminates flooded in the quarter with pressed benefit and low inventories among the enterprises.
Asia Pacific
In China, feedstock urea prices have gained more than 2% in early February owing to strong demand fundamentals. Consistent rise in Urea prices have prompted Melamine manufacturers to keep the prices on an upward trend amid strong demand from both domestic as well as international market. Constrained supply in some key regions have provided ample opportunities for market participants to move higher in price negotiations. The price of Melamine in China towards the end of the quarter observed to be USD 1765/ton FOB Qingdao. Inventories of Melamine increased and the poor transaction of new orders by enterprises has led to the stockpiling. Prices slipped towards the last month in India due to weak market sentiments and sufficient product availability.
Europe
In European market, the cost of Melamine rose unprecedently with rising tension among Russia and Ukraine. Spot offtakes remained robust, and significant plant turnaround kept the costs on the upper end. Feedstock Urea and Nitrogen costs were likewise expanded with solid market sentiments and lacking product accessibility. Nonetheless, logistics constraints and surge in transportation cost made players to export the product to United Kingdom and Spain. In Germany, the cost of Melamine in this quarter rose by nearly USD 300-350/MT from the previous quarter. Inventories were on the lower end with pressed benefit influencing the sales and revenue of the downstream subordinate market.
For the Quarter Ending December 2021
North America
In Q4, the prices of Melamine surged as compared with Q2 and Q3 with the marginal level due to shortage of raw material Urea. The demand of Melamine had also increased with its consumption in downstream construction industry. Local producers had increased the prices of Melamine as the insufficient supply pressurized the end user industries to fulfil the requirement of the consumers. In December, feedstock Urea market was comparably quiet, and the only activities came from US Gulf traders for New Orleans, Louisiana due to New Year holiday. The gap between relatively low prices in the US and higher price in rest of the globe remained wide enough in December that were still economically viable.
Asia Pacific
In Q4, the prices of Melamine surged in the first half of the quarter and maxed out in November in India where the prices (for 99.8% purity) hovered around $3300/ton Ex-Ahmedabad-$3530/ton Ex-Ahmedabad. Towards the end of the year, due to New Year eve the prices of Melamine dipped to $2275/ton Ex-Ahmedabad. Natural gas value volatility and export checks in a several key inventory market, however, continue to support urea pricing. Accordingly, steady mellowing situation likely for Asia Pacific region for Melamine for this quarter. In China, the prices were surged in the first half of Q4, where the prices were driven by surging energy cost, supply curtailment and trade policies. Downstream Paint Plastic industries were also operated moderately during this period
Europe
With the rise in cost of Natural Gas in the coming winters the feedstock prices increase in Q4, compared with Q2 and Q3. Melamine prices have firmed in this quarter following the spectacular increase in natural gas prices and continued tight supply in most regions. The outlook remains bullish, with Urea likely to faced pressure with increase in consumption in its downstream. Prices have been driven by flooding energy costs, supply abridgements, and trade strategies. In December, the melamine market operating rate was over 80%, however the demand side was feeble, and there was no conspicuous improvement. The market cost of melamine has fallen strongly, corporate inventories are feeling the squeeze, and the focal point of market dealings has debilitated.
For the Quarter Ending September 2021
North America
The Melamine market witnessed an upward trajectory in the North American region during the third quarter of 2021. After Hurricane Ida made landfall in September, 79% of offshore oil production and about 78% of natural gas production in the US Gulf coast went offline, thereby affecting upstream availability. In terms of demand, improved offtakes were observed as building and construction sector picked up in this quarter. Taking support from soaring feedstock prices and increased freight costs, prices of Melamine increased in North America during Q3 2021. Demand was also improving from the automotive sector, which remained hit due to extended semiconductor shortages.
Asia Pacific
The prices of Melamine rose effectively across the Asia Pacific region in Q3 of 2021. Strong values of feedstock Urea and prolonged supply crises due to an array of challenges like port congestion, high freight costs, and plant closures in China in compliance to the dual energy norms adhered to a strong push to Melamine prices in India throughout the quarter. CFR price for Melamine 99.8% Purity grade shot up from USD 1364/MT to USD 2781/MT in India from July to September. Buyers turned cautious due to the optimism prevailing from early inquiries in wake of the upcoming peak demand season across Asia. In China, high price of upstream urea continued to affect the producer’s margins while downstream buyers cautiously awaited ease in the domestic prices.
Europe
In the European region, the pricing trend of Melamine witnessed a steep rise during the 3rd quarter of 2021 on the back of the consistent demand from the building and construction sector. Strong values of upstream Urea and supply crises have pushed the Melamine prices in Europe during this quarter. Buyers turned cautious in Q3 due to escalations in Natural Gas pricing and tight domestic supplies across the region. Availability remained a key issue as delayed imports arriving from Asia created a backlog.
For the Quarter Ending June 2021
North America
The North American region observed a seasonal hike in the Melamine demand outlook as downstream enquiries from the building and construction sector picked up in the second quarter. Spot buyers turned up to replenish the inventory levels ahead of the upcoming hurricane season. Supplies in the North American showed improvement from the previous quarter as the industrial infrastructure recovered from the damages incurred during the winter storm in Q1 and the producers ramped up the operation rates to fulfil the inflow of enquiries. Due to the high demand and limited supplies, Cornerstone Chemicals increased Melamine prices by USD 440.92 per MT in May. The FOB Texas pricing discussion was assessed at USD 2611 per tonne in June.
Asia Pacific
During the first half of Q2, several Chinese Melamine producers seemed more export oriented amidst tight supply outlook in the Asia Pacific region. Manufacturing facilities in China were operating at higher levels even though the price spread between Urea-Melamine narrowed throughout the quarter due to the rising demand of Urea from the fertilizers sector. A key manufacturer in Japan declared planned force majeure amid the annual maintenance schedule. China’s Melamine demand outlook was majorly driven by the strong trading across the overseas market whereas Indian buyers were observed reluctant to procure large orders amidst pandemic-related uncertainties. In India, Melamine Ex-Works prices were assessed around USD 1366 in June.
Europe
Melamine supplies in the European regions were curtailed by a significant quantity, owing to turnarounds at some production facilities in the second quarter of 2021. However, imported Chinese shipments surged in the European market lending somewhat downward pressure to the overall product pricing during the quarter. Several European Melamine producers were heard complaining of deteriorated margins due to ample Chinese imports. Demand surged in the second quarter due to consistent offtakes from the building and construction sector.
For the Quarter Ending March 2021
North America
Melamine supplies were severely tight during the first quarter of 2021 in the North American region, the plant shutdowns in the USA Gulf region due to the unprecedented severe freeze weather conditions which led to the power outages in several production units that hindered the availability of key feedstocks. Demand surged ahead of the better offtakes from the downstream sectors. The regional buyers became more flexible towards the Asian market to procure the commodity which showcased the improved arbitrage from the Asia Pacific region. The prices in the North American region were hiked due to tight supplies and better offtakes from the downstream sectors, followed by high shipping freight charges.
Asia-Pacific (APAC)
Melamine supplies were ample during the first quarter of 2021 in the Asia Pacific region, as several plants in China and southeast Asian region were heard operating at maximum capacity. During the second half of the quarter, supply constraints prevailed as various plants in China stopped production on account of the Chinese lunar new year holidays. The demand outlook was improved during the first quarter. In February, India extended anti-dumping duty against Chinese Melamine in vanguard of cheap imports. The prices of Melamine in India during March were assessed around USD 1232/ton.
Europe
Melamine supplies were short the European region, due to reduced imports from the USA amid bad weather conditions, followed by the transport hiccups which capped the supplies of raw materials. The arbitrage from the Asian suppliers were improved throughout the quarter. In February, Borealis, a leading European company dealing in base chemicals, fertilizers and the mechanical recycling of plastics announced to divest from its fertilizers segment including technical nitrogen and melamine products. Melamine supply-demand gap widened during the quarter due to some shortages which led to surge in prices of product throughout the quarter.
For the Quarter Ending September 2020
Asia
Melamine market in Southeast Asia remained dull during the quarter ending September, weighed by the sluggish demand from downstream industries against ample production in China. As China was observed exporting ample cargoes to the neighboring countries, India announced an anti-dumping probe on Melamine imports under the plea by its domestic manufacturers. Furthermore, mounting inventories of feedstock Urea in India, also lent a downward pressure on its prices. Since the overall demand remained uncertain, buyers were seen adopting a wait and see approach depending upon the spot demand. Owing to the sluggish offtakes of the product, its prices in India traced a downward trajectory in Q3 of 2020. Melamine was assessed around USD 939 per MT CFR Mundra.
North America
With several plant shutdowns heard in the Gulf Coast region, following the spates of seasonal Hurricanes, supply of Melamine in North America remained dull throughout the quarter. Likewise, Cornerstone Chemicals, a leading producer of Melamine in the U.S. was seen implementing production turnaround at few of its units in Louisiana as a precautionary measure. However, operations at downstream companies were not severely hindered by the supply shortage as most of them had enough inventories to cater to the spot demand. As per regional traders, Melamine is likely to rebound by the next quarter as the market will be operating at full swing to replenish the sputtering economy.
Europe
The European Melamine market remained oversupplied as various Asian countries were seen dumping their cargoes in the region in order to widen export revenues in times of weak domestic demand. Although the demand fundamentals of Melamine remained plagued by the uncertainties caused by Coronavirus, several manufacturers reported a marginal revival in demand compared to the previous quarter. Demand from the construction sector also improved with increase in number of do-it-yourself (DIY) home renovation projects.
