Overcapacity of melamine intensifies

The recent domestic market trend of melamine is weak and prices continue to decline. At present, the lowest factory price has dropped to about 8,300 yuan (t price, the same below). The production of 1 ton of melamine requires more than 3 tons of urea. Together with other consumption, the total cost is around 8,500 yuan, and melamine is currently running below cost. Of the many factors that contribute to the status of melamine, supply exceeds demand is undoubtedly the key factor.

"Since 2000, China's melamine surplus pattern has gradually emerged. There will be 13 new manufacturers this year and next year, with 450,000 tons of new production capacity, and 280,000 tons of new production capacity in the following year. The short-term increase in production capacity and downstream demand Under the influence of multiple factors, such as limited growth and continuous shrinkage of export space, China’s melamine production capacity will be intensified.” Chen Duanyang, sales director of Sichuan Jinsheng Cerui Chemical Co., Ltd. said in an interview with reporters yesterday.

Followed by the project

The melamine industry enjoyed good profits in the last year or two, causing an increase in production. Recent statistics from Sichuan Jinxiang Chemical Co., Ltd. show that in 2010 there were about 28 melamine manufacturers in China (with a yield of over 6,000 tons/year) and a production capacity of 1.0447 million tons, mainly distributed in Sichuan, Shandong, Henan, Shanxi, and Hebei. Places rich in coal and natural gas resources. It is expected that 13 new melamine manufacturers will be added this year and next year, with an additional capacity of 450,000 tons and an additional capacity of 280,000 tons in the following year. In the next few years, the total production capacity will reach 1.77 million tons.

He said that with overcapacity, companies still have to go ahead, and another reason is that the upstream urea enterprises have a serious excess capacity, and they are looking for a way out. Although we know that the market has already exceeded supply, we all want to win with our own resources, scale, and financial advantages. With the rapid expansion of production capacity, competition in the industry is bound to intensify. At present, some small-scale, technologically backward companies have ceased production, and reorganization and divestment of melamine business have also occurred from time to time.

Export space shrinks

According to Chen Duanyang’s introduction, China is the world’s largest melamine producer and exporter, and exports account for about 30% of total domestic production. Last year, China’s export of melamine was 134,600 tons, accounting for 35.16% of the total global exports. However, melamine also faced oversupply worldwide, with the surplus amounting to 578,000 tons last year. Although the raw material and energy costs have increased repeatedly, the melamine international market price has not risen correspondingly. The export prices of China's export prices have also been lowered all the way in the past few months. EU anti-dumping has affected China's exports of melamine to the EU, while Qatar, Trinidad and Tobago, each 60,000 tons/year production line put into production strongly squeezed the domestic melamine export market, if the international market prices continued to rise, domestic exports Space will shrink.

In recent years, the global melamine industry is undergoing a reshuffle between the old and the new. Some old companies have withdrawn, and some new projects with more raw material cost advantages have begun to exert themselves. It is reported that in order to maintain its market position, the world's leading melamine suppliers have begun to intensify the development of new melamine production processes to reduce costs, such as the short-process high-pressure method recently developed by DSM. At the same time, melamine production giants have begun to transfer melamine production facilities to major oil and gas producing regions such as the Middle East and Central America. The 80,000-ton/year plant of the UAE International Petroleum Investment Corporation is expected to be completed in 2014; Russia also uses its energy advantages to seek German Lu The advanced melamine production technology provided by Qiqi Company will soon form a production capacity of 50,000 tons/year. Internationally, a number of technologically advanced melamine units have been put into operation one after another, which will seriously reduce China's export space.

It's hard to show good signs

Chen Duanyang said that in recent years, according to the operating data, the economic situation in the past few years has improved and real estate has developed rapidly. Therefore, the profitability of the melamine industry is still acceptable. However, the operating rate of the melamine industry is only 60% to 70%. At present, the international economic situation is increasingly uncertain. In particular, the global melamine consumer market in Europe and the United States has experienced a complete economic recession, which has led to a significant decline in the operating rate of new real estate, sharp decline in the amount of construction and decorative materials, and a serious decline in demand for melamine. Even if the economic situation improves, it will take some time before it is transmitted to entities.

China's melamine is mainly used in laminates, wood adhesives, surface coatings, molding compounds, paper and fabric processing and other fields. From 2007 to 2010, the total demand for melamine in China was 368,000 tons, 409,000 tons, 502,000 tons and 550,000 tons respectively. Although there was a slight increase overall, the increase was not significant. Laminate is the largest consumer of melamine. In 2010, consumption accounted for 45% of total consumption, followed by coatings. Compared with the rapid expansion of melamine, the growth in traditional downstream applications has been much slower. Last year, the overcapacity amount was nearly 500,000 tons. Even if the exports were removed, there was still a large surplus of 134,600 tons.

Chen Duanyang said: "At present, the state has not yet shown any signs of relaxation in the regulation of the real estate industry, and the associated building formwork market and laminate flooring market are deeply affected and demand is declining. The future growth of China's building materials and wood processing industry may be in trouble and will affect The demand for melamine has increased, while the development of new downstream products has been slow, and the development of limited varieties has also been detrimental to the promotion and application of melamine."

He stressed that in the long run, melamine outlets lie in the expansion of applications. At present, BASF's melamine paint has already been harvested. Sichuan Jinxiang Chemical Co., Ltd. has also developed a melamine fiber that is expected to be used in fireproof clothing. Once the wall paint, environmental protection furniture and other application markets are developed, it will be digested. Large part of production capacity.