Price trend

This week, the melamine market continued its weak performance, with both supply and demand weakening, putting downward pressure on prices. As of September 8, the benchmark melamine price on SunSirs was 5,687.50 RMB/ton, up 0.44% from 5,662.50 RMB/ton at the beginning of the month.

Analysis review

Below is a price list for major regions:

As of September 8, the melamine market showed the following main characteristics:

Prices were generally consolidating weakly. As shown in the table, although individual companies such as Anhui Jinhe and Chongqing Jianfeng raised their prices (by 50 and 100 RMB/ton, respectively), the domestic average price still fell by 0.54% month-on-month. Mainstream prices were generally low, with ex-factory prices in East China ranging from 5,130 to 5,350 RMB/ton, with the explicit mention of "partial negotiable," indicating that there was room for discounts in actual transactions.

Demand remained weak: The market was experiencing a "weak buying and selling atmosphere," with downstream companies primarily purchasing on demand and few new orders. This was primarily due to the continued downturn in downstream end-use industries such as real estate, which had led to sluggish demand in key consumer sectors such as wood-based panels.

Industry operating rates remained relatively high, putting pressure on corporate inventories: Although capacity utilization declined slightly on September 5th (57.92%) compared to the previous day, overall capacity utilization remained elevated around 58%. The combination of high operating rates and sluggish demand was putting pressure on some companies to maintain inventory.

Poor production profits: Industry data shows that production profit margins have turned negative (-1.38%) and are expected to continue to decline, indicating that many companies are operating at a loss at current price levels.

Urea prices fell: Upstream urea prices saw a slight decline. As of September 8, the benchmark price for urea on SunSirs was 1,703.75 RMB/ton, down 0.51% from 1,712.50 RMB/ton at the beginning of the month. This weakened support for melamine costs and weighed on market sentiment from the cost side.

Future outlook:

In the short term, the melamine market faces limited positive factors, and the market is expected to remain weak and volatile. The core market contradiction lies in the imbalance between high supply and weak downstream demand. Without significant improvement on the demand side, further slight price declines cannot be ruled out. It remains to be seen whether downstream production resumptions after the end of autumn will lead to a recovery in demand.

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