Since the start of 2026, the domestic melamine industry has operated within a framework characterized by the continued release of production capacity, weak domestic demand, and exports serving as the primary pillar of support. Export volumes in March saw a substantial month-on-month increase, becoming a key factor in absorbing domestic excess capacity and stabilizing the market. Based on the latest customs import and export data, industry production capacity, price trends, and the logic of upstream and downstream price transmission, the current state of the melamine market and its driving factors are summarized below.

I. Sharp Rise in March Exports and Comparison of Customs Data

According to customs data, melamine exports in March 2026 reached 72,800 tons, a substantial month-on-month increase of 40.81%. The average export price stood at US$744.10 per ton, up 3.18% month-on-month, with both volume and price rising to set a new high for the year.

Cumulative exports for January to March totaled approximately 189,800 tons, representing a year-on-year increase of over 25%;

Cumulative exports for the same period in 2025 stood at approximately 151,000 tons, with the year-on-year growth rate having expanded significantly;

The main export destinations were India, Turkey, Vietnam, Brazil and Thailand, with the top ten countries accounting for approximately 71% of total exports. China accounted for over 60% of global melamine trade, further consolidating its leading position. The substantial growth in exports effectively offset weak domestic demand, becoming the core pillar supporting the industry’s operations.

II. Melamine Production Capacity and Supply Landscape in 2026

Domestic melamine production capacity continues to expand, with total industry capacity reaching approximately 2.78 million tons in 2026, a further increase from 2025. New capacity is primarily concentrated in regions with advantages in raw material supply, and supply pressures within the industry continue to mount.

The supply side exhibits three key characteristics:

Overcapacity has become the norm, with domestic demand unable to fully absorb production, making exports a necessity;

Industry operating rates remain within the 68%–73% range, with enterprises producing based on sales and facing significant inventory pressure;

Supply is ample, manufacturers are keen to offload stock, and market competition is relatively intense.

Against the backdrop of a slow recovery in domestic demand, exports have become the primary means of alleviating production and sales pressures and stabilizing industry operations.

III. Price Trends and Upstream-Downstream Transmission Logic

1) Price Trends (Business Society April Benchmark Price)

Melamine: The mainstream price in April was around RMB7,000 per ton, a significant increase from the start of the year; prices briefly surged to nearly RMB 10,000 in March before retreating from their peak and consolidating in April;

Urea (key raw material): The benchmark price in April was RMB1,840–1,920 per ton, a slight increase from the start of the year, with clear support from the cost side.

2) Key Reasons for the Surge in Exports

Significant price differential between domestic and international markets, making exports highly cost-effective

Although domestic prices have risen, they remain competitive compared to the international market. Enterprises are enjoying substantial export profits, leading to high enthusiasm for accepting orders.

Robust overseas demand

The recovery of industries such as panel manufacturing, adhesives and coatings in regions including India, Southeast Asia and the Middle East has created stable, essential demand for melamine, with restocking demand being released in a concentrated manner.

Weak domestic demand prompts enterprises to shift focus overseas

Operating rates in downstream industries such as panel and decorative materials remain moderate, with procurement driven primarily by essential needs. As pressure to move domestic stock increases, enterprises are prioritizing the fulfillment of export orders.

Improved logistics and trade environment

Maritime transport has experienced temporary smoothness, enabling the seamless delivery of orders and driving a concentrated surge in exports during March.

3) Price Transmission Across the Supply Chain

Upstream urea: Prices fluctuate at high levels, accounting for over 65% of costs, providing strong cost support for melamine;

Melamine: Rising costs combined with export support have kept prices at elevated levels; however, downstream acceptance of high prices is limited, and upward momentum has weakened;

Downstream panel and coatings sectors: Demand remains stable but is unlikely to exceed expectations; there is resistance to high raw material prices, with purchases driven primarily by essential needs, and price increases are not being effectively passed on.

Overall, the market presents a pattern characterized by cost-driven support, export backing, moderate domestic demand, and price fluctuations at high levels.

IV. Market Outlook

In the short term, melamine is expected to continue consolidating at high levels, with strong export support. The effect of the significant increase in exports in March persists, domestic supply pressure has eased somewhat, and cost-side support remains. However, downstream demand is limited, and there is insufficient momentum for prices to surge significantly further.

In the medium term, domestic capacity is expected to continue expanding, domestic demand is unlikely to see a significant recovery, and exports will remain the key variable determining market strength. Should exports remain at high levels, the market is likely to remain stable; should overseas orders decline, domestic supply pressures will re-emerge, and prices will face downward pressure.

Overall, in 2026, the melamine industry has entered a new phase characterized by ‘weak domestic demand and exports as the key driver’. The significant increase in exports in March underscores the importance of overseas markets, and future export trends will continue to dictate the market’s direction.

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