Since the beginning of this year, the melamine market has suffered a Waterloo, with prices continuously bottoming out. As of June 30th, the benchmark price of melamine in SunSirs was 5,875.00 RMB/ton, a decrease of 1.26% compared to the beginning of this month (5,950.00 RMB/ton), setting a new record for the lowest price of the year. Compared to the same period last year (when the highest price exceeded 7,500 RMB/ton), the price had decreased by 15.94%. In June, it fell below 6,000 RMB/ton. The core driving force behind this deep correction was undoubtedly the fundamental shift in the market supply and demand pattern.

Production cost impact

In the first half of this year, the high profit margin and stable operation of the melamine industry greatly stimulated production enthusiasm. Manufacturers increased their operating rates, resulting in a rise in production and a significant increase in net market supply. Especially in June, social inventory accumulated to a relatively high level. However, in sharp contrast to the hot demand on the supply side was the weakness of downstream demand. As the main consumer sector, the artificial board industry showed a sluggish performance in the entire industry chain, and the operating rate of domestic board companies had also remained low. This made the demand for melamine appear particularly flat.

As the core raw material of melamine, the price fluctuation of urea directly affected the market trend. The volatile decline in melamine prices in June was largely due to the cost collapse of urea - dragged down by weakened terminal demand and international oil prices. As of July 1st, the benchmark price of urea in SunSirs was 1,823.00 RMB/ton, a decrease of 3.65% compared to the beginning of last month (1,892.00 RMB/ton). This not only directly lowered the production cost line of melamine, but also exacerbated the downward pressure on its price through market expectations transmission.

Export is the focus of demand increment

In 2025, the cumulative monthly export of melamine from January to May was 263,100 tons (+0.34% year-on-year), with an estimated annual total of 302,200 tons.

Annual average urea price predicted to be lower than the first half of the year

Preliminary judgment shows that the average price of domestic urea (Shandong small and medium-sized granules) in the second half of the year will be lower than that in the first half, and the core operating range may be between 170-2,100. Market driven by stages: loose supply and demand in July and August may lead to a stepped decline; Benefiting from local production restrictions and light storage, there may be a slight rebound in September and October; At the end of the year (November and December), under the influence of multiple uncertain factors (exports, light storage, gas head, macro, and unexpected events), price volatility increases and fluctuates repeatedly.

Supply and demand forecast for the second half of the year

With the release of new production capacity in the second half of the year, the melamine industry's production capacity may reach 220 tons per year by 2025. The newly added facilities include the Xinjiang Yankuang facility, which was put into operation in July but is still unstable, the Henan Tianqing facility, which is planned to be put into operation in the third quarter, and the Shaanxi Longhua facility, which is planned to be put into operation in the fourth quarter. The timely commissioning of these three devices is the key to achieving the total production capacity target mentioned above

The trend of loosening real estate policies in the second half of the year may continue, but the significant increase in incremental demand still needs to wait. Specific demand rhythm: The off-season from July to August restricts the recovery of domestic demand; After September, with the end of the off-season, melamine consumption is expected to increase.

Market outlook

Based on comprehensive supply and demand, the melamine market is unlikely to see a significant rebound in the second half of the year. July: The concentrated maintenance of faults supports the price increase in the first half of the month, and the market weakens in the second half with the recovery of equipment. August: Prices may remain stable under the support of major repairs in Xinjiang. September-October: Benefiting from improved demand and rising prices of urea raw materials, the market is expected to rise. November-December: As the domestic Spring Festival approaching, demand is decreasing, but export plans are being supported by pre-production or incremental growth. The mainstream ex factory price range is expected to be between 5,400-6,300 RMB/ton in the second half of the year.

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