For the Quarter Ending December 2023
North America
In Q4FY23, Melamine prices in the North American market exhibited mixed sentiment, rising in October, declining in November and December. In October, the US market saw minor price fluctuations with a focus on sectors like coating, lamination, and other end-use industries. The construction industry showed moderate activity, and although there was an uptick in investment for certain structures, reduced spending in other areas offset growth.
Urea price variations impacted the US market. November witnessed an increase in US Melamine prices driven by expanding demand in the construction and lamination sectors. In December, Melamine prices in the US surged due to supply constraints and heightened demand from downstream industries, particularly in anticipation of Christmas and New Year festivities, stimulating robust demand.
The positive trend in the December PMI suggested sustained demand from various industrial segments, contributing to the upward price movement. The surge was linked to a supply-demand imbalance, with Melamine inventory levels dropping, exerting upward pressure on prices, while the feedstock Urea price remained moderate. The increased spending on home renovation projects and strong demand from the laminate and automobile sectors contributed to the overall rise in Melamine prices, reflecting market tightness. As of December, Melamine prices in USA were assessed at USD 1856/MT FOB-Texas.
APAC
In Q4FY23, Melamine prices in the China market exhibited mixed sentiment. October and December saw a decline due to factors like reduced feedstock urea and lower natural gas prices, impacting orders from the manufacturing sector. Concerns arose from a significant drop in contracts in the civilian and public sectors, reflecting a challenging scenario in the China construction industry, leading to reduced demand in the downstream laminate sector. Persistent challenges in the housing market marked a four-quarter reduction in contract values. Oversupply and ongoing destocking processes contributed to a downward price trend, intensified by decreased crude oil and feedstock urea prices. Manufacturers strategically engaged in destocking, reducing inventories. In November, Melamine prices rose due to increased feedstock (Urea) costs and disruptions in supply. Surging demand in the housing and automotive sectors, along with a sudden halt in feedstock urea shipments, created a supply constraint, driving prices higher. This surge was characterized by increased new orders, underlining the growing demand for Melamine in various industries. The imbalance between supply and demand, influenced by disruptions in feedstock shipments, contributed to supply chain issues and increased prices. The rise in Melamine prices was fueled by robust demand from the downstream automobile and laminate industry, creating a competitive market. As of December, Melamine prices in China were assessed at USD 1334/MT FOB-Busan.
Europe
In Q4FY23, Melamine prices in the European market showed mixed sentiment. In October, German Melamine prices increased due to operational costs and a moderate demand outlook, influenced by ongoing challenges in Germany's real estate sector. The Association of German Pfandbrief Banks reported a 1.7% decline in property prices, impacting construction firms. In November, Melamine prices dropped amid weak demand, with the market reacting negatively to October's sales record, destocking inventories. The German market observed declining demand, reflected in reduced stock sizes and new orders, with traders showing pessimistic enthusiasm. December saw a decline in Melamine prices in Germany due to decreased feedstock urea and lower natural gas prices. The wood furniture market adversity and challenges in the German chemicals industry contributed to reduced orders, impacting melamine consumption. Manufacturing in Germany continued to contract in December, with a PMI indicating declines in output and employment further, Manufacturers strategically destocked, lowering inventories, exerting downward pressure on prices. Oversupply decreased crude oil and feedstock urea, and weakened procurement contributed to reduced production costs, prompting manufacturers to adjust prices. Diminished demand from the construction industry led to a market-wide reduction in melamine, mirroring weakened global demand, ultimately contributing to a decline in prices in Germany. As of December, Melamine prices in South Korea were assessed at USD 1539/MT FOB Hamburg.
