Weak supply and demand balance melamine narrow range oscillation

From a technical point of view, the current price is below each moving average, and the short-period moving average is below the long-period moving average, indicating that the market is in a weak shock pattern. At the same time, the downstream low amount of procurement, so that the market supply and demand tend to weak stability.

Prices are all historically low: the six dimensions of "10-day position, 20-day position, 30-day position, 60-day position, 90-day position, and one-year position" in the table are all displayed as "low". This shows that the current price is not only a recent low, however also in the absolute trough range of nearly a year.

Cost-side analysis: Urea cost support remains unstable.

As the main upstream raw material of melamine, the market change of urea immediately affects the cost support of melamine.

Urea price evaporative environment: the recent urea market is intertwined, supply and demand patterns remain loose. while the benchmark price of urea rose slightly to 1760.00 yuan/ton on November 4 (up 0.86 per cent from the beginning of the month), this was greater a immediate disturbance by news such as India's tender expectations and the sentiment of light reserves.

Weak cost support: overall, urea itself is facing high enterprise inventory pressure and agricultural demand off-season test, price increases lack of sustainable momentum. Therefore, the cost support of urea to melamine is relatively limited, and it has failed to form a strong push up effect on the price of melamine.

Supply-side analysis: Capacity emit is creating pressure.

In November, the supply side of the melamine market is facing the pressure of capacity emit.

The operating rate rebounded: With the resumption of production of some of the parking maintenance devices in the early stage, the operating rate of the melamine sector has rebounded sharply and has now risen to a high of about 72%.

Supply increment shows: the resumption of device production has brought significant supply increment. In addition, there are still new domestic production capacity waiting to be released. In the long run, the situation of loose melamine supply has not changed fundamentally. The high operating rate and sufficient supply of goods have significantly suppressed the current market price.

Demand-side analysis: the terminal just needs limited support.

At present, the traditional demand to melamine is off-season, and the overall performance of downstream demand is flat.

Downstream just need to purchase: affected by the downturn in the terminal real estate sector, the main consumption areas of melamine such as impregnated paper, decorative board, paint and other industries under-started. Downstream factories generally implement the strategy of "just need and consumption", and there is little centralized replenishment behavior.

Exports are difficult to have become the main engine: while exports have eased part of the inventory pressure to a certain extent, due to the impact of policies and international market price fluctuations, exports show "pulse" characteristics and are not sustainable. On the whole, the weakness of the demand side is the core factor restricting the price rise of melamine.

Future Market Outlook

On the whole, the current melamine market is in a pattern of "loose supply, flat demand and unstable cost. while downstream bargain-hunting has formed a certain support to prices, the high operating rate on the supply side and the continued downturn on the demand side have made the market lack a clear upward driving force. It is expected that in the short term, the price of melamine will continue to be stable and maintain a narrow range of shocks. The follow-up needs to pay close attention to the implementation of the downstream winter storage policy and whether there are new device maintenance plans, which might have a marginal impact on the market supply and demand stability.

Spot through the principle and method]

(Source: Business Society)