Following the holiday, the melamine market was characterized by a "waning of supply-side advantages and a temporary stabilization of prices." The earlier expectation of supply contraction due to maintenance at some production facilities had largely been absorbed by the market, while the slow recovery of downstream demand resulted in insufficient upward momentum, leading to a period of narrow price consolidation for melamine.
Market dynamics and price performance
1. Price trend:
After the holiday, the market stabilized: As of January 5th, SunSirs' benchmark price for melamine was 5,637.50 RMB/ton, unchanged from the beginning of the month and basically the same as the level at the end of December 2025, with slight adjustments of ±50 RMB/ton in some regions.
The "high price, low demand" characteristic was evident: while quoted prices remained stable, actual market activity was generally sluggish, and downstream buyers had limited acceptance of current prices, mainly making small purchases based on immediate needs.
2. Supply side:
By the end of December 2025 and during the New Year period, some facilities undergoing maintenance (such as those in Shandong and Xinjiang) gradually resumed production. The overall operating rate of the industry recovered from approximately 65% before the holidays to 70%-72%. With the recovery of supply, market concerns about supply shortages had dissipated. However, given that the operating rate was still at a moderate level compared to the same period in previous years, there was no serious pressure from oversupply yet.
3. Cost side:
The price of urea, the main raw material, also showed a stable to slightly weaker trend after the holiday. As of January 5th, SunSirs' benchmark price for urea was 1,725.00 RMB/ton, unchanged from the beginning of the month. This provided limited cost support for melamine.
4. Demand side:
Major downstream industries such as panel manufacturing and coatings were slow to resume operations after the holiday, resulting in insufficient new orders. They were mostly adopting a wait-and-see approach regarding melamine purchases, focusing primarily on depleting pre-holiday inventory. International market demand showed no significant bright spots, and the volume of newly signed export orders was limited, failing to provide effective support for the domestic market.
Core Market Analysis
"Favorable factors fading" was the key phrase: the main factor driving the slight upward trend in late December 2025 - reduced supply due to maintenance shutdowns- had ended. The market driver had shifted from "expected supply tightening" to "actual supply and demand dynamics."
The power struggle behind the "temporary stability": The main reasons why prices did not fall immediately after supply recovered were:
1. Manufacturers had a strong intention to maintain stable prices: Most factories temporarily had no inventory pressure and were inclined to hold prices firm near their cost levels.
2. The demand had not been completely disproven: The market still anticipates a potential short-term restocking by downstream buyers before the Spring Festival, which is creating expectations of a price floor.
3. Absolute price level: The price was in the lower-to-middle range of prices over the past six months, limiting the potential for further significant declines.
In the short term, the market is expected to continue the pattern of "range-bound fluctuations under a weak balance of supply and demand." The next direction of price movement will depend on the evolution of the following key factors:
Summary
The melamine market was in a transitional phase where old drivers were fading and new drivers had yet to emerge. Market participants were advised to remain cautious and avoid having overly high expectations for unilateral price movements. Trading strategies should focus on range trading and purchasing based on actual needs, while closely monitoring changes in the key data points mentioned above.
If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.
