In the first half of 2025, the domestic melamine market ended with a downward trend in prices. Starting from the end of May, the market showed a clear downward trend. Although the support of raw material costs briefly stabilized, market prices continued to decline, repeatedly breaking through the annual lowest prices, mainly due to the sustained imbalance between supply and demand.

Supply side analysis: Production growth intensified market contradictions

Yield changes

In the first half of 2025, the continuous loose supply of melamine in the domestic market has become one of the key factors causing downward pressure on prices. From January to March, due to the demand for replenishment after the Spring Festival, export support, and the rise in urea raw material prices, the market slightly rebounded, and production showed a trend of first decreasing and then increasing, maintaining overall relative balance. However, since April, production was increasing month by month, reaching its highest point in the first half of the year in May, surpassing 150,000 tons. Meanwhile, during the same period, weak domestic demand and intensified supply-demand contradictions led to sustained price declines. Although the cost side remained high and the industry's profit margin continued to narrow, some companies had been forced to adjust production, resulting in a slight decline in production in June.

Domestic urea price trend chart (January-June)

As of July 9th, the benchmark price of melamine in SunSirs was 5,875.00 RMB/ton, a decrease of 7.13% compared to the beginning of the year (6,400 RMB/ton).

Domestic melamine price trend chart (January-June)

Device loss amount

In the first half of 2025, the cumulative loss of melamine industry in China was about 405,000 tons, an increase of 11.32% year-on-year. Quarterly review:

The loss volume in the first quarter was relatively high, and in addition to routine maintenance, the increase in maintenance frequency of some facilities in Sichuan and Shanxi was the main factor.

The loss volume in the second quarter decreased compared to the previous quarter, and most enterprises maintained stable production. Only a few external urea companies were forced to shut down due to cost pressures.

Demand side analysis: coexistence of weak reality and strong rigid demand

In the first half of 2025, the overall demand for melamine in the domestic market showed a weak trend, mainly affected by the sustained downturn in the real estate market. Downstream industries generally adopt conservative procurement strategies, with rigid demand as the main focus. Industry monitoring data showed that the demand intensity index in the first half of the year was only 62, a decrease of 20.5% compared to the same period last year. Among them, rigid demand procurement accounted for as high as 85%, an increase of 12 percentage points year-on-year.

From various application fields, there was a clear differentiation in performance. As the main demand side of the sheet metal industry, its correlation with the real estate industry was as high as 0.82. Dragged down by a 28% year-on-year decline in new construction area, the scale of enterprise orders has significantly shrunk to 20% -35% of the same period last year. Specifically, the monthly procurement volume of large enterprises had sharply decreased from 3,000-3,500 tons to 1,200-1,500 tons, with a more significant decrease in procurement volume for small and medium-sized enterprises.

Although the overall demand for impregnated paper industry was stable, its internal structure was undergoing adjustments. The demand for traditional products decreased by 5% year-on-year, while environmentally friendly and functional products achieved year-on-year growth of 18% and 25%, respectively. The market transformation trend was obvious, and 32% of enterprises have completed production line transformation to adapt to new market demand changes.

It is worth noting that although the growth rate of packaging material demand has slowed down to 3.2%, the proportion of export orders has increased to 18%, demonstrating a certain market resilience. Meanwhile, the penetration rate of green building materials is expected to reach 35% by the end of the year, and the customized furniture market is expected to maintain a growth rate of 12%. These positive factors provide important support for the overall market demand.

Market outlook

It is expected that demand in the third quarter will remain at the current level, with a seasonal impact coefficient of 0.7. Looking at the whole year, market demand may decrease by 5% -8% year-on-year, but in an optimistic scenario, it may achieve a trend of flat growth. Market participants need to closely monitor the adjustment of real estate policies and the cultivation of emerging demand growth points.

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