Melamine Market - Restrictive Measures on Imports from China Fail to Alleviate the Downturn
Photo: © kadmy / Bigstockphoto
The introduction of a trade embargo in 2011 on Chinese imports has failed to end the decline in EU melamine production.
In 2016, the anti-dumping tariffs (€X) on melamine imports from China, introduced by the European Commission for a five-year term at the request of Europe's largest manufacturers - OCI in the Netherlands, Borealis (Germany-Austria) and Zakłady Azotowe Puławy S.A. (Poland) - are about to expire. These companies were seeking support in their struggle to win over melamine's industrial consumers. The latter mainly consists of manufacturers that use melanine in the construction sector - concrete, laminate flooring, decorative panels, paints, varnishes, adhesives, and heat and sound insulation. Melamine is also in demand from car manufacturers and producers of chemical fertilizers.
According to IndexBox estimates, EU melamine consumption fell by X% from 2010-2015 - from X to X tonnes. A year following the introduction of the tariff, China's share in the structure of consumption deteriorated sharply - from X% in 2010 to X% in 2011 (Figure X). By 2015, however, it had regained its previous level of X% (X thousand tonnes out of X thousand tonnes).
From 2010-2011, EU melamine imports increased twofold - from X to X tonnes (Fig.X). Despite a shortlived tumble in 2012 (-X% to X tonnes), imports remained at this level, indicating that the EU melamine market had attained a new balance.
Immediately after the tariff was introduced, China's share in melamine imports to the EU plummeted from X% (2010) to X% (2011). By 2015, however, it had recovered slightly, reaching X% (X thousand tonnes out of X tonnes).
Reduced melamine imports from China were not replaced by their EU-manufactured counterparts. From 2010-2015, EU melamine output contracted by X% - from X to X tonnes; the share of domestic supply in consumption tumbled from X% to X% over the same period. In contrast, the share of imports from Russia in terms of the melamine imports structure posted a significant increase - from under X% in 2010, to X% in 2015.
Despite the EU-imposed restrictions, China has managed to increase melamine exports overseas: from 2010-2015, exports surged by a sesquialteral amount - from X to X tonnes. China achieved this figure by adapting its export destinations. In 2015, the share of exports to the Netherlands, Belgium and Italy accounted for less than X% of Chinese exports; in 2010, it was a little over X%. From 2010-2015, China aggressively stepped up its melamine exports to Turkey (at an average annual rate of X%), Thailand (X%) and South Korea (X%). In 2015, Malaysia assumed the largest share in terms of Chinese exports (X%), followed by South Korea (X%), Thailand (X%) and Turkey (X%).
EU melamine manufacturers are concerned that the EU market will once again be flooded by cheap imports from China, once the tariff term ceases to be effective. In 2016, therefore, the European Commission started to consider its possible extension.
Irrespective of the European Commission's decision, IndexBox analysts forecast that EU melamine production is set to shrink further in the medium term; the unrelenting decline in consumption will essentially be the main impetus for the downturn in production. The prosperity of the EU melamine manufacturers will only improve in the event of a rise in prices, which is sometimes accompanied by a decline in production: in 2013, for example, melamine prices increased a sesquialteral amount against the 2012 figure, amidst a X% contraction in output (Fig.X). However, EU manufacturers will find it difficult to even count on a rise in prices, should the tariff on Chinese melamine imports be diminished.
Do you want to know more about the EU melamine market? Get the latest trends and insight from our report. It includes a wide range of statistics on
- melamine market share
- melamine prices
- melamine industry
- melamine sales
- melamine market forecast
- melamine price forecast
- key melamine producers
Source: IndexBox AI Platform
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