1. Market review of the month
1.1 Analysis of domestic melamine price trends

Figure 1
China’s melamine market continued to decline in May. In the early part of this month, with the recovery of early parking devices, the operating load ratio of enterprises increased to nearly seventy percent, the supply of goods increased, while downstream demand was light, the supply and demand pattern tended to be loose, and manufacturers were under constant pressure to receive orders and shipments; In addition, the price of raw material urea has fallen rapidly, and the cost side has also had a certain negative impact; As a result, melamine prices have also opened a downward channel again. In the middle and late months, although some enterprises stopped for maintenance, the operating load rate gradually fell to about 50%, but because the market inventory has always existed, the supply of goods is still relatively sufficient. And urea prices continue to fall, cost support continues to weaken, aggravating the industry’s wait-and-see sentiment. The fundamentals are bearish, melamine is also difficult to hold, and the price continues to fall.

2. Market analysis forecast for next month

Figure 2
In the forecast for the next three months, the downstream market is basically in the traditional consumption off-season stage, and the demand-side support is limited; It is necessary to pay attention to the start of enterprises and changes in the urea market, if the price of urea continues to decline, the melamine production cost line will move down, and the overall operating load level of the enterprise may still be relatively high under the profit margin of by-products, and the market still has downside under the loose supply and demand pattern, but it is expected that the decline will be limited, and the price may hover around the cost line.

Remark: The analysis is based on transaction in China’s domestic market, it’s only for reference.

Contact information: melamine@easthony.com