In 2004, worldwide demand for melamine was 1.2 million tons, 14% more than 2003. The global capacity ability is 1.522 million tons, and China produced 0.5 million tons, taking up 24.8%. However, the domestic market demand was only 0.25 million tons. The supply has exceeded demand. It is estimated that China will produce 0.6 million tons of melamine in 2005, which will prick up this unbalance.

    Even now, many domestic corporations are still fond of investigating in producing melamine. Those big corporations have extended their equipment one after another. For example, Urumchi Petrochemical extended from 12 000 t/a to 24 000 t/a, Panjin Fertilizer Factory doubled its equipment, and Henan Zhongyuan Group extended from 12 000 t/a to 50 000 t/a. Apart from these large extension, numbers of small scale equipments are also being built.

    Those small scale equipments utilize two-stage process. They need to consume 3.8 t urea to produce 1 t melamine, while large scale ones only need 2.9~3 t. The large corporations mostly export their products while small corporations could only sell products domestically. Therefore, the price of melamine will continue decreasing.

    Domestic corporations always rush into mass action, which results sightless extension and low-grate repeated production. At present, 13 large corporations have set up Melamine Business League, which will report market information to those small corporations.

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