1、 Current situation of MELAMINE production process
Melamine, commonly known as melamine or albumen, is a triazine type of nitrogen containing heterocyclic organic compound, usually produced from urea. As an important chemical raw material, melamine can react with formaldehyde to synthesize melamine Resin. Melamine resin has a higher hardness than urea formaldehyde resin, is not flammable, and is resistant to water, heat, aging, electric arc, and chemical corrosion. It has good insulation performance, glossiness, and mechanical strength.
The high-pressure liquid phase extraction and cooling process developed by Italy's Ouji Company, the pressurized gas phase quenching process developed in China, and the high-pressure liquid phase extraction and cooling process being promoted by Switzerland's Casale Company in China are currently the mainstream production processes for melamine in China.
2、 Melamine Industry Chain
Melamine can be produced by generating synthetic ammonia from natural gas (coal) or by melting urea. Therefore, the upstream raw materials are mainly coal, natural gas, and urea, and the main energy sources are electricity, coal, or natural gas. The downstream application fields of the melamine industry are mainly wood processing, molding compounds, coatings, textiles, paper making, and other industries, which are closely related to the national economy. Macroeconomic prosperity has a significant impact on the development of this industry.
Melamine is widely used in advanced coatings, laminates, decorative panels, adhesives, molded products, and paper, textile, leather, electrical, pharmaceutical, and other industries. Currently, in the domestic consumption structure of melamine, the consumption of plates and impregnated paper accounts for 58%, the consumption of adhesives accounts for 20%, the consumption of coatings accounts for 10%, and other consumption accounts for 12%.
3、 Analysis on the Development Status of China's Melamine Industry
1. Capacity
In recent years, the production capacity growth of China's melamine industry has slowed down compared to the previous period, but overall, it is still relatively stable, with the total production capacity maintained at around 1.9 million t/a. Since 2010, the production capacity of China's melamine industry has been in a period of transition between the old and the new, mainly manifested in the elimination of outdated production capacity with high energy consumption, serious pollution, and small scale, and the construction of large devices with low energy consumption, environmental friendliness, and high product quality.
In 2021, China's melamine production capacity was concentrated in regions such as Xinjiang, Shandong, and Henan (basically regions where urea enterprises were relatively concentrated), with Xinjiang, Shandong, and Henan accounting for 25.46%, 19.91%, and 14.58% of melamine production capacity, respectively.
2. Production
In terms of production, China's melamine production in 2019 was 1.3 million tons, a year-on-year increase of 0.99% compared to 1.29 million tons in 2018. The significant increase in production in 2017-2018 was mainly due to the high price of melamine at the end of 2016, which released a positive signal to domestic melamine production enterprises, and some enterprises increased production capacity and expanded production. As of 2021, China's melamine production is about 1.5 million tons.
3. Import and export
China is a major exporter of melamine worldwide. The export situation of melamine in China from 2015 to 2022 is as follows. According to statistics, as of 2022, the export volume of melamine in China was 534000 tons, a year-on-year increase of 5.64%, and the export amount was 750 million US dollars, a year-on-year decrease of 11.82%.
In 2022, the top ten countries and regions in China's melamine export volume are India, Türkiye, Germany, Thailand, Brazil, Vietnam, Russia, South Korea, Malaysia and Indonesia, with the export volume of more than 20000 tons, 338700 tons in total, accounting for 63.43% of China's total export volume.
4. Apparent demand
In 2016-2020, China's apparent demand for melamine showed a slow growth trend, with a relatively significant increase in 2017-2020. The main reason is that the vigorous development of industries such as panels and coatings, as well as the strict environmental requirements of the panel industry for formaldehyde release, have promoted the upgrading of adhesives, thereby increasing the domestic demand for melamine; By 2021, China's apparent demand for melamine was 995300 tons, a year-on-year decrease of 3.0%.
5. Price trend
From the perspective of the price trend of melamine in China, the price of melamine in China increased significantly in 2021, mainly due to a significant increase in export volume. After nearly two years of control of the COVID-19, the global economy has gradually recovered, and the demand for melamine abroad has increased, effectively supporting the domestic market price of melamine. Secondly, domestic economic growth has gradually resumed. Centralized procurement for domestic demand, influenced by the mentality of buying up rather than buying down, has resulted in strong domestic purchasing willingness, and the gradual improvement of the domestic melamine downstream plate product market has also increased demand for melamine. Moreover, the price of chemical products changes periodically.
Since 2022, the price of melamine in China has been decreasing step by step. Affected by the high profit margin of melamine in 2021 and the improvement in the operation quality of industrial devices, manufacturers in the first half of 2022 showed a very high enthusiasm for starting operations, resulting in a subsequent increase in operating rates, a significant increase in production, and a significant increase in net market supply. From August to December 2022, the price of melamine in China remained stable at around 8300 yuan/ton.
4、 Major Melamine Enterprises in China
As a basic chemical raw material for deep processing of natural gas or coal, melamine products have relatively small differences in product quality and performance among major production enterprises due to the continuous maturity of production processes. Currently, product competitiveness is mainly reflected in the high and low production costs, resulting in a high degree of marketization and fierce market competition. Currently, the number of domestic producers with an annual output of melamine exceeding 100000 tons has increased from one to four, including Sichuan Jinxiang Chemical, Xinjiang Xinlianxin, Shandong Hualu Hengsheng, and Shanxi Fengxi Fertilizer.
5、 Prospect of Melamine Industry
1. With the control of the global COVID-19 and the gradual recovery of the economy, the international and domestic markets for melamine have shown greater demand. After hovering at a low level in the previous two years, the price of melamine has significantly increased in 2021, and the promotion of new standards in the melamine industry is expected to drive domestic demand growth. Therefore, the melamine market should maintain a relatively prosperous level in the short term, while the long-term trend will be affected by domestic overcapacity and its price level will return to a reasonable range. Enterprises planning new projects should remain rational.
2. The melamine production process technology is relatively mature, and more consideration should be given to the combination of technology selection with the advantages of its own enterprise. Only with sufficient funds, flexible sales channels, stable raw material supply, and reasonable planning for new or renovated joint production can we maximize our strengths and avoid our weaknesses, maintain the healthy development of the enterprise, and continuously create economic benefits in the adjustment of the supply side structure.
"Overcapacity remains the primary issue restricting the development of the melamine industry, and enterprises planning new projects should remain rational." Gu Zongqin, chairman of the China Nitrogenous Fertilizer Industry Association, once commented on the melamine industry in 2021. In addition to resolving the crisis of overcapacity, the development of the melamine industry needs to carry out energy efficiency and emission reduction benchmarking, continuously promote the progress of production processes, and better achieve green production; At the same time, it is necessary to continuously develop downstream markets, extend the industrial chain, gradually replace non green and environmentally friendly additives and materials, and vigorously carry out research and development of new products in the direction of new materials, continuously promoting the green and healthy development of the melamine industry.
