Market Price:

As of October 10, the melamine market price performance could be summarized as "flexible fluctuations amidst weak consolidation." As of October 10th, the benchmark price of melamine on SunSirs was 5,562.50 RMB/ton, up 0.22% from 5,550 RMB/ton at the beginning of the month. This price remained relatively low for the year and even in recent years. However, actual transaction prices in the market ranged widely, with negotiated prices at the lower end dropping to 5,050 RMB/ton.

This reflected the coexistence of "inflated" prices and "hidden price cuts." High-end quotations reflected the willingness of major manufacturers to maintain prices, while low-end transactions revealed weak demand and strong bargaining power of downstream companies.

The primary driver of short-term flexible price increases wasn't the drag of demand, but rather supply-side contraction and marginal cost support. When some companies reduced production due to losses, temporarily tightening local supply, prices can experience tentative increases. However, these increases were precarious. Once prices rebound to a certain level, they face selling pressure from hedgers and traders eager to sell, leading to a weakening of the upward trend.

Supply side:

The supply side was the most important stabilizer in the market, but it was also full of helplessness. The industry's operating rate of 50%-55% was far below the healthy level. This was not an active choice made by the company, but the result of the combined effect of "passive shutdown" and "active price protection". Some high-cost, old equipment has been unable to maintain production due to the continuous "price-cost" inversion (theoretical losses are 100-200 RMB/ton) and has been forced to withdraw. Another part of the leading companies have consciously adjusted the market supply by reducing the load and arranging centralized maintenance, trying to reverse the supply and demand pattern. This was a strategic "production reduction to maintain prices."

The biggest pressure on the supply side came from high factory inventories. Inventory days generally ranged from 15-20 days, far exceeding safety limits. This weighed heavily on manufacturers, straining their cash flow and testing their confidence in maintaining prices. Meanwhile, the market for urea, the primary raw material, continued to decline due to an imbalance in supply and demand. This has deprived melamine of a key cost support, squeezing manufacturers' profit margins to the brink of profitability.

Demand Side:

The demand side was the weakest link in the market, and its weakness was both structural and global. Melamine's largest downstream industry, the board and coatings industry, was highly tied to the prosperity of the real estate and construction sectors. The real estate industry was still undergoing a period of deep adjustment, with new construction starts and construction area continuing to decline, directly leading to a contraction in the overall rigid demand for melamine. Downstream factories themselves were facing insufficient orders, with operating rates significantly declining year-on-year, and their willingness to purchase raw materials was extremely low.

Downstream customers have generally adopted a "low inventory" operating strategy and were generally bearish or cautious about the market outlook. Their purchasing behavior was completely rigid, "buy as needed," with small single purchase quantities and extreme price sensitivity. This prevented market demand from forming an effective and sustainable driving force.

Sluggish international market demand, coupled with intensified competition from low-cost products from regions like the Middle East, has led to a significant year-on-year decline in total exports this year. This has forced some production originally intended for export to be sold domestically, further exacerbating supply pressures in the domestic market and creating a vicious cycle of competition within the domestic market.

Looking ahead to the future market, the melamine market will be in a continuous game between "weak reality" and "strong expectations".

Short-term Trend (next month): The market is expected to continue its bottoming-out pattern. Prices are unlikely to rise significantly and are more likely to fluctuate widely within the current low range. Upward movement will be firmly blocked by high inventories and weak demand, while downward movement will be supported by corporate losses and willingness to cut production. Any price rebound will be short-lived and unsustainable.

In summary, the melamine market after October 2025 is in a difficult bottoming phase. Market participants should abandon their hopes for a unilateral surge and instead adapt to seeking opportunities amidst volatility. In terms of operations, buyers should maintain a low inventory and small batch strategy; sellers should prioritize reducing inventory and maintaining cash flow. Closely monitoring changes in inventory, costs, and macroeconomic policies will be key to understanding the next phase of the market.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.