Market Overview
Overall, the melamine market has shown weak fundamentals this week. According to the Commodity Market Analysis System of Shengyi Society, as of September 4th, the reference price of melamine was 6750.00, a decrease of 0.37% compared to September 1st (6775.00). Under the support of the decrease in production capacity utilization rate in northern industries, the probability of market price stability has increased due to the shutdown or maintenance plan of some facilities in the north.
Overall, there is an expectation of a decrease in the utilization rate of melamine production capacity in the northern region, which supports manufacturers to raise prices.
Supply side
This week, domestic urea prices have continued to decline on a large scale, with most companies in mainstream regions such as Shandong, Hebei, Henan, and Anhui lowering their quotes by 30-40 yuan/ton. The ex factory price in Shandong has now fallen to 1890 yuan, and mainstream regions have officially entered the market starting from 2018. The transaction price in Inner Mongolia has fallen below 1800 yuan, and the outsourcing price in Xinjiang is as low as 1570-1600 yuan/ton.
According to the Commodity Market Analysis System of Shengyi Society, as of September 5th, the benchmark price of Shengyi Society’s urea was 2151.00 yuan/ton, a decrease of -1.01% compared to the beginning of this month (2173.00 yuan/ton).
In terms of demand
The melamine market has recently cooled down, and from the perspective of demand and raw materials, the market has weak positive news and insufficient demand follow-up. It is reported that some sheet metal factories have recently reduced their operating load, and considering that the supply of melamine will increase in the later maintenance and restoration of multiple factories, downstream manufacturers and traders have reduced their demand for melamine procurement.
Overall, the decrease in local production capacity utilization rate of melamine has provided support for the market, but there is insufficient demand and raw material benefits, and the overall market atmosphere is average. It is expected that the short-term market situation will be mainly stable and fluctuating, and in the long run, the market will lack guiding factors and may mainly follow the market trend.
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