Melamine market rally continued moving average "positive expansion" release acceleration signal

1. spot market: ladder upward, stand firm immediate highs

Judging from the recent price direction, the melamine market shows obvious characteristics of "advance, two retreat and one" or "measure-by-measure" rise:

Price performance: At the beginning of the week (July 27), the price was 6125.00 yuan/ton, and then experienced a slight shock consolidation, breaking through the 6187.50 yuan/ton mark on July 31, and further climbing to a high of 6212.50 yuan/ton in early August. Despite a 0.00 per cent rise and fall on August 2, the overall upward direction in the center of gravity has not changed.

Raw material comparison: upstream urea benchmark price is 1757.50 yuan/ton, the same as at the beginning of this month. Melamine prices are not driven by costs, greater from the sector's own supply tightening or demand improvement, product profit margins have been repaired.

The current price has fully occupied the "high" range of nearly 10 days, 20 days, 30 days and 60 days. It is worth noting that while the short and medium term is high, the price is still in the "medium low" and "low" in the long cycle dimension of 90 days and one year, which means that in the long run, the current price is still in the rebound stage after the bottom repair, and there is still prolonged space above.

2. spot pass technical analysis: moving average long arrangement, rising momentum accelerated

Based on the spot pass mean spread indicator and moving average system analysis, the current market released a positive bullish signal:

Average pattern: The 10-day moving average and the 20-day moving average both show a smooth upward direction. In particular, the slope of the 10-day moving average is steeper, always above the 20-day moving average, forming a standard "long arrangement".

Mean difference signal: The current 10-day moving average is above the 20-day moving average, and the opening distance between the two lines is gradually widening. According to the core principle, this shows that the rise is accelerating, the buying power is stronger than the selling, the market sentiment is high, and the price inertia is greater likely to rise in the short term.

while the direction is positive, prices have hit "highs" in the short cycle (10-60 days), which usually means that immediate profit margins are greater generous. If the subsequent volume can not continue to enlarge, need to be alert to the demand to high shock digestion.

3. Supply and Demand Game and Future Outlook

The core logic of the current melamine market is "tight supply to support price increases":

Supply side: part of the device maintenance or load reduction led to a reduction in the market circulation of goods, manufacturers have a strong willingness to support prices, inventory pressure is small, which is the main driving force to promote price increases.

Demand side: downstream plate and compound fertilizer sector acceptance of high-priced raw materials can be, just need to purchase to maintain stability, with the supply side of the contraction, together pushed up the market price.

After the market outlook:

In the short term, the melamine market is expected to continue the strong direction of strong shock. The technical "positive expansion" signal supports the price to continue to test the upper pressure level. However, as prices enter the short-cycle "high" zone and move away from the prolonged moving average, the market might face a technical correction or sideways consolidation to repair the indicators at any time. It is recommended to pay close attention to the changes in the operating rate of manufacturers and the pace of downstream pick-up, if there is a volume stagflation signal, need to pay attention to the risk of correction.

Spot through the principle and method]

(Source: Business Society)