Recently, the domestic melamine market has maintained its strong upward trajectory; driven by a confluence of rising production costs, tightening supply, and manufacturers holding firm on pricing, the overall price level has shifted significantly higher. The following is a detailed analysis of recent market trends:
Price trend
Last week, the upward trend in melamine market prices intensified even further compared to the week prior. According to data from SunSirs, the benchmark price for melamine stood at 6,625.00 RMB/ton on March 17. Compared to the 6,300.00 RMB/ton recorded on Monday (March 10), the price surged by 325 RMB/ton in just five days—marking a weekly increase of 5.16%. When compared to the price at the beginning of the month (March 1), which was 5,970.00 RMB/ton, the cumulative increase reached 655 RMB/ton, pushing the overall gain to 10.97%. This price level also set a new recent market high.
Based on daily data, prices last week exhibited a trend of continuous upward momentum. On March 10, the price stood at 6,300.00 RMB/ton; subsequently, between the 11th and the 13th, it rapidly broke through the 6,337–6,446 RMB/ton range. Over the weekend, the rally accelerated further, surging above 6,550 RMB/ton, and on the 17th, it reached a high of 6,625 yuan. This steep upward trajectory clearly reflects the current market's strong underlying structure.
The Confluence of Cost, Supply, and Demand
1. Cost Side: The sharp surge in upstream raw material prices last week served as the primary driver behind the rise in melamine prices. Recent geopolitical incidents in the Strait of Hormuz have disrupted imports of methanol—a critical raw material—causing domestic methanol prices to jump by over 7% in a single day, thereby directly driving up urea production costs. As urea serves as a direct feedstock for melamine, the upward pressure on its price has clearly cascaded along the "methanol → urea → melamine" industrial chain. Concurrently, the intense volatility in international crude oil prices has provided strong cost support and a risk premium across the entire chemical industry chain.
2. Supply Side: While costs have been on the rise, the supply side has shown no signs of easing. Although the industry's overall operating rate fluctuated last week, it remained at a relatively low level; moreover, frequent startups and shutdowns of production units resulted in a limited volume of spot goods circulating in the market. Data indicates that as of March 16, the domestic melamine capacity utilization rate stood at 56.99%. While this figure marked a slight uptick from the previous period, the resumption of operations at facilities such as Henan Dahua, Henan Tianqing, and Shandong Helitai over the weekend was counterbalanced by shutdowns at other major facilities—specifically, the large-scale plant at Sichuan Jinxiang and the Linyi facility at Shanxi Fengxi. This "ebb and flow" pattern of shutdowns and resumptions has made it difficult to establish stable expectations regarding market supply, thereby exacerbating the prevailing short-term tightness in the market.
Against this backdrop, manufacturers’resolve to hold firm on pricing—and even their reluctance to sell—has intensified significantly. As last week began, major manufacturers continued to implement price hikes with high frequency:
On March 16–17, Chongqing Jianfeng successively raised its ex-factory prices, with cumulative increases totaling 400 RMB/ton, bringing the price to 6,400 RMB/ton.
On March 17, Shanxi Fengxi raised its ex-factory price by 300 RMB/ton to 6,700 RMB/ton. This price now stands significantly above the market benchmark, signaling the company's strong confidence in future market prospects.
On the same day, Sichuan Meifeng also raised its ex-factory price by 250 RMB/ton to 6,200 RMB/ton. Notably, the plant's 50,000-ton facility is currently shut down, further reducing market supply.
3. Demand Side: Downstream sectors—specifically the board and molding compound industries—have fully resumed operations following the holiday period, thereby establishing a foundation of rigid demand support. The commencement of work at numerous construction sites nationwide has stimulated demand for construction formwork, serving as a fundamental driving force for melamine consumption. Although demand was not the primary catalyst behind the recent price rally, it nonetheless provided the underlying basis for sustained price appreciation, facilitating the smooth transmission of cost-side pressures downstream.
Market Outlook
Looking ahead to next week, the melamine market is expected to maintain a firm, high-level trend. On the supply side, manufacturers generally face no inventory pressure; furthermore, with several production units remaining offline, producers' resolve to uphold prices is unlikely to diminish in the short term. Regarding costs, the raw material urea market is projected to remain robust—bolstered by demand from spring plowing—and will continue to provide underlying support for melamine prices.
However, market risks are also accumulating. As prices continue to climb, downstream enterprises' willingness to chase rising prices may begin to wane; their capacity to absorb high-priced raw materials remains to be seen, and there may be room for negotiation regarding certain high-priced transactions. Market participants are advised to closely monitor raw material price trends, the progress of restarts at idled facilities, and the actual order intake situation among downstream players.
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