Price trend:

The "localized price increases" in the melamine market were the result of a combination of factors, including a short-term tightening of supply, a slight increase in costs, and persistently weak demand. The market was temporarily characterized by a stalemate at high price levels.

According to data from SunSirs, in the week following November 26th, the average domestic price of melamine rose from 5,530 RMB/ton (November 26th) to 5,600 RMB/ton (December 1st), a cumulative increase of approximately 1.11%. Entering early December, the price increase slowed significantly, indicating that the upward momentum was weakening.

This recent price increase was primarily driven by changes in supply and rising costs, but demand acted as a significant constraint.

Supply side: localized tightening and companies holding firm on prices

The overall capacity utilization rate of the industry slightly decreased from 62.20% to 60.80% at the end of November, resulting in a slight contraction in supply. Some manufacturers had sufficient pending orders and low inventory levels, which formed the core basis for them to maintain prices and continue to push up quotations.

Cost side: Raw material urea prices were rising

On December 2nd, the benchmark price of urea according to SunSirs was 1,702.50 RMB/ton, an increase of 2.71% compared to the beginning of the month (1,657.50 RMB/ton). This provided strong cost support for melamine prices.

Demand side: continued to be weak, resistant to high prices

Downstream industries such as artificial board manufacturing were affected by the real estate market, and demand had not fundamentally improved. As prices rose, downstream buyers were increasingly resistant to high-priced goods, leading to a slowdown in new orders for manufacturers. This is the fundamental reason why price increases were unsustainable.

Market outlook

In summary, this "localized price increase" was not driven by a recovery in demand, but rather by short-term factors on the supply side, and its sustainability was weak. The future direction of the market will depend on the downstream acceptance of prices and further changes in the operating rates of upstream companies.

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