Price trend

This week, the melamine market did indeed show a pattern of "mainly stable with a narrow upward trend." As of February 11, the benchmark price of melamine on SunSirs was 5,737.50 RMB/ton, an increase of 1.10% compared to the beginning of the month (5,675.00 RMB/ton).

Market Dynamics

The recent market stability was mainly due to the balance of three factors: cost, supply, and demand.

1. Cost side: The price of raw material urea rose in January, providing rigid cost support for melamine and limiting the downside potential of its price.

2. Supply side: Although the previously shut-down equipment resumed production one after another and the industry's operating rate had rebounded, there had not yet been a serious oversupply pressure, and the market supply and demand were in a state of weak balance.

3. Demand side: Downstream industries such as wood-based panels and coatings resumed operations at a slow pace, mostly adopting a just-in-time purchasing strategy, and a large-scale pre-holiday stockpiling surge did not materialize. Meanwhile, the export market remained stable but failed to provide an unexpected boost.

Market Outlook:

Overall, the melamine market is expected to continue its range-bound trading pattern in the period leading up to the Spring Festival. A solid cost floor and strong price-stabilizing intentions from producers indicate that prices are unlikely to fall sharply in the short term. Weak domestic demand and exports that have not yet generated significant momentum also limit the potential for substantial price increases.

The market's next direction will depend primarily on factors such as the strength of downstream restocking after the holiday and whether export orders can improve significantly.

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