CEH Report

Table of Contents

Abstract

The current world market for melamine is tight. Supplies tightened in early 2010, as world consumption accelerated in response to recovering economies. Factors behind the tightness in supply include production outages, low inventories, increased world consumption and the fact that melamine production from capacity commissioned in mid-2010 did not contribute significantly to world supply.

Laminates and wood adhesives account for approximately 73% of world consumption. In 2010, conventional laminates accounted for approximately 80–85% of melamine consumption in laminates, while laminate flooring accounted for the remainder.

China is the largest single participant in the melamine market, accounting for 39% of world consumption in 2010; it accounted for 53%, 46% and 26% of world capacity, production and exports, respectively, in 2010. This trend is expected to continue during 2011–2015, as significant growth in Chinese consumption will result in the commissioning of additional capacity and increased production.

As a region, Europe is the second-largest melamine market, accounting for nearly 32% of world consumption in 2010.

World consumption of melamine is expected to be robust during 2011–2015; average annual growth is expected to be 3–5% in most regions. China, Central and South America, the Middle East, and Central and Eastern Europe are expected to exhibit rapid demand growth.

China is forecast to experience the fastest growth rates (around 8%) and volume increases in melamine consumption during 2010–2015. However, China's share of exports is expected to decline as a result of increased domestic consumption, competition from other sources of supply including Qatar and Trinidad, and increased regionalization of supply, in which many consuming regions are likely to source melamine locally.

During 2010–2015, melamine consumption in Europe is forecast to grow at an average annual rate of almost 4%. Growth in Central and Eastern Europe is expected at almost 8%, largely the result of increased production of laminates and wood adhesives; consumption growth in Western Europe is forecast at a more moderate rate of 3.0% during 2010–2015. Other Asian countries, excluding Japan, are expected to show large volume increases during 2010–2015, at an average annual growth rate of 4.4%.

Overall economic performance will continue to be the best indicator of future demand for melamine. Demand in most downstream markets is greatly influenced by general economic conditions. As a result, demand largely follows the patterns of the leading world economies. The major end-use markets include construction/remodeling, automotive production and original equipment manufacture (OEM).