Price Trends: A monthly decline exceeding 10%, oscillating at low levels.

This week, the melamine market continued the downward trend observed since mid-April. According to data from SunSirs, the benchmark price fell to 6,137.50 RMB/ton on May 27, marking a slight daily decline of 0.20%. Compared to the price of 6,875.00 RMB/ton at the beginning of the month, the decline within the month reached 10.73%. Current prices have retreated to a relatively low range—levels not seen in nearly a year—and the market's trading focus continues to shift downward.

Market Fundamentals:

Cost Side: Prices for urea—the primary raw material for melamine—have displayed weakness recently. Although some urea producers have attempted to raise their quoted prices, the overall industry chain index remains at a low level, failing to provide effective support. The decline in raw material costs has directly eroded the price floor for melamine, thereby creating room for manufacturers to lower their prices.

Supply Side: Although some production units within the industry have currently entered scheduled maintenance periods—thereby easing supply pressure to some extent—this has failed to reverse the downward trend. The reason is that the reduction in supply resulting from maintenance has been entirely offset by the dual bearish factors of falling costs and sluggish demand. As the market shifts from a "cost-driven upward trend" to a "cost-collapse-driven decline," the bullish impact of maintenance appears utterly negligible.

Demand Side: Demand from downstream sectors—such as the board manufacturing and melamine powder industries—shows no signs of recovery; purchasing remains limited to immediate, essential needs, accompanied by strong resistance to high-priced raw materials. Driven by a "buy-on-the-rise, sell-on-the-fall" mentality, downstream players are maintaining a strong wait-and-see stance, which further suppresses the likelihood of any price rebound.

Market Outlook

Overall, the melamine market is currently under the dual pressure of "collapsing costs and sluggish demand." Although the supply side is receiving some support from scheduled plant maintenance, this is insufficient to offset the impact of declining production costs. Technical indicators suggest that downward momentum persists; consequently, the market is expected to continue its weak, bottom-seeking trend in the short term. Moving forward, key factors to watch include the trajectory of urea prices and whether downstream demand can show signs of recovery, stimulated by current low price levels.

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