Key Takeaways: This week (as of March 11), the domestic melamine market continued its strong upward trend. Driven by high raw material costs, a sudden tightening of supply, and concerted price support from manufacturers, major companies saw their ex-factory prices rise by as much as 400 RMB/ton in a single day, reflecting a strong bullish sentiment in the market.

Price trend:

According to data from SunSirs, the benchmark price of melamine was 6,337.50 RMB/ton on March 11, a cumulative increase of 6.16% compared to the beginning of March (5,970.00 RMB/ton). Looking at the weekly performance, the cumulative increase in the past week has reached 3.05%, indicating a clear upward trend in prices.

Upward drivers:

1. Cost side:

The core driver of this round of melamine price increases came from a significant rise in upstream raw material costs. Recent geopolitical events in the Strait of Hormuz have disrupted methanol imports, a key raw material for melamine, leading to a single-day increase of over 7% in domestic methanol prices, directly pushing up urea production costs. As a direct raw material for melamine, the upward pressure on urea prices was clearly transmitted along the "methanol → urea → melamine" industrial chain, providing the most fundamental cost support for the price increase of melamine.

2. Supply Side:

While costs were rising, supply was also tightening. Some plants have not yet fully resumed operations after the Spring Festival maintenance shutdowns, and the market's spot market circulation was already limited. Against this backdrop of tightening supply, market sentiment was bullish, further pushing prices up.

3. Companies Concentrate on Price Support

March 9th to 10th became the key window for this round of price increases, with major manufacturers collectively and significantly raising their ex-factory prices:

Hebei Xinji Jiuyuan: On March 10, the ex-factory price surged by 400 RMB/ton to 6,100 RMB/ton, an increase of 7%, clearly signaling a tightening supply and demand in the spot market.

Shandong Shuntian: Price increased by 400 RMB/ton to 6,000 RMB/ton, an increase of approximately 7.14%, reflecting a significant improvement in enterprise pricing confidence. Hualu Hengsheng: Priced at 5,600 RMB/ton on March 9th, up 100 RMB/ton; further increased to 5,900 RMB/ton on March 10th, a cumulative increase of 200 RMB/ton over two days.

Companies such as Sichuan Meifeng and Helitai Technology also raised prices significantly by 250-400 RMB/ton.

This widespread and substantial price increase, coupled with the actual shutdown of some plants, had led to short-term supply shortages in the market. Producers were facing no pressure to ship their products, resulting in a reluctance to sell and most companies suspending order acceptance.

4. Demand Side:

Downstream industries such as sheet metal and molding compounds fully resumed operations after the holiday, providing rigid demand support. According to analysis by China Sheet Metal Network, the prices of chemical raw materials such as melamine have risen sharply, coupled with the large number of construction sites starting work nationwide, resulting in high demand for building formwork and continuously pushing up end-user sales prices. Although demand was not the main driver of this price increase, it provided the "passport" for price increases, allowing cost pressures to be smoothly passed on to downstream industries.

Summary

As of March 11, the tightening supply dominated market sentiment. Following the ignition of "buy high" sentiment, the market was experiencing a strong upward trend. Most companies had suspended accepting new orders, awaiting further price increases. Rising raw material costs and strong price-holding intentions from producers are expected to continue supporting the short-term market.

Short-term forecast: The melamine market is expected to remain firm for the remainder of this week, with the possibility of further price increases. However, it's important to note that the actual downstream demand capacity to absorb the price increases remains to be seen, and there may be room for negotiation on some high-priced transactions. Investors should closely monitor the restart progress of shut-down plants, raw material price trends, and the actual situation of downstream demand.

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