That part is called a gasket and I'm inclined to think that is is not melting but could be leaking oil. Some of the gaskets supplied with the kits are of questionable quality and can leak even when the exhaust pipe flange is tightened correctly. Any auto parts store can supply you with gasket material which you can cut with a good pair of sissors or snips. If you are unsure about the thickness needed take your old gasket with you. It is about 1/8th inch thick. Use the exhaust pipe flange as a guide and make the gasket match it perfectly. Cut it carefully making sure you cut out a hole in the center as big or just a little bigger than the pipe size. If you are using the kit hardware, studs, bolts, etc, be careful when retightening them. They can strip easily with over torquing. Use an anti seize compound on the threads, tighten the nuts just enough to flatten the lock washers then just a little more. If you don't feel confident making a gasket yourself you can order replacements here. ENGINE_KIT_PARTS_PAGE_2
This should get you going but keep asking if you have further problems.