April 20, 2021

Strong international market demand Strong export of melamine in China

From July 1, domestic melamine export tax rebate rate was reduced from 13% to 5%. At the same time, the domestic melamine export quotation generally rose in July, and most of the current offshore export quotation was between US$1030 and US$1090 (t price, the same below), which increased by US$100 to US$140 in June before the tax rate adjustment. This means that the newly increased export costs due to the reduction of export tax rebates will all be borne by the importer, which is rare at present. At present, the additional costs of other export products are mostly shared by the import and export sides or borne by the exporter alone.
Why can melamine export be so strong? There are two reasons for this:
On the one hand is the demand from the international market. Due to the better downstream conditions, the international melamine market has been actively trading in the near future and the supply of goods has been tight, resulting in an increase in market prices. At present, the contract price of melamine in Europe is between 1115 and 1205 euros, which is 30 euros higher than at the beginning of July; the price of melamine in the United States is between 1546 and 1657 US dollars, up 69 to 92 dollars over June; the CIF price of melamine in Southeast Asia is also lower than that at the beginning of July. Increased by 20 US dollars to reach 1090 to 1130 US dollars. The industry outlook for melamine still looks bullish.
On the other hand, China has a strong position in the international melamine market. Although the production of melamine in our country was relatively late, the development rate was very fast. The output has increased from 130,000 tons in 2001 to more than 400,000 tons in 2006. With an average annual increase of 20% in production, the average annual growth rate of melamine demand has also reached 10% to 20%. It is expected that this year's demand will reach around 300,000 tons.
In addition, China uses 20% to 40% of melamine annually for export, mainly exported to Europe, the Americas, Asia, and Australia. Since the beginning of this year, melamine has exported more than 10,000 tons per month. By May, the cumulative export volume has increased by 114% from the same period last year to 62,000 tons, the highest in history. As China has become an important export base for the international melamine market, it has a greater impact on the international market.
At present, both in terms of production capacity, market demand, and export trade, China's melamine is in a strong international position. From the perspective of production, urea prices for natural gas, energy, and raw materials have increased significantly in recent years. Some melamine units in Europe, the Americas, and Asia have been forced to stop or reduce production due to high production costs, while new melamine has been built in China because of relatively low urea production costs. The capacity of the device is large, and the output increases rapidly. In terms of demand, China is one of the fastest growing regions in the world for melamine demand. In terms of export trade, the export volume of melamine in China is increasing. Currently, it accounts for about 10% of the world's total melamine demand, which plays a decisive role in the international market. And from the perspective of development trends, the strong position of China's melamine in the international market will be even more prominent.

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