Price trend

Recently, the market price of melamine has shown signs of weakening and has not exhibited a consistently strong upward trend. The overall market is under the expectation of oversupply, with prices supported by costs but demand remaining weak. As of January 13th,SunSirs' benchmark price for melamine was 5,625.00 RMB/ton, a decrease of 0.22% compared to the beginning of the month (5,637.50 RMB/ton).

Market Analysis

Supply Side:

The current situation on the supply side is characterized by a tendency towards "expected easing" but "actual pressure." In the absence of strong demand, even low operating rates can lead to de facto supply pressure due to difficulties in shipping products. This explains why the market has not seen a "firm upward trend" driven by supply shortages, but rather instances of some companies lowering prices.

Demand side:

Downstream industries such as sheet metal and coatings have not shown any improvement, and demand has consistently been the weak link in the market. Without strong demand to drive it, the market is unlikely to achieve true stability.

Cost side:

As of January 13th, SunSirs' benchmark price for urea was 1,745.00 RMB/ton, an increase of 1.16% compared to the beginning of the month (1,725.00 RMB/ton). The urea industry is in a capacity expansion cycle in 2026, leading to significant supply pressure. It is expected that the price level will further decline throughout the year. This weakens the most important cost support for melamine in the future.

Overall, the current melamine market is characterized by a combination of weak current conditions and weak future expectations:

Weak market conditions: In early January, two major producers (Shanxi Fengxi and Sichuan Yulong) lowered their ex-factory prices by 50 RMB/ton, directly disproving the notion of a widespread "firm market." Meanwhile, several mainstream companies maintained stable prices or adopted a wait-and-see attitude.

Weak expectations: The market's forecast for the entire year of 2026 is for ample supply and weaker cost support, which will limit the potential for price increases.

Therefore, the so-called "stability" is more likely to manifest as prices not experiencing a panic-driven sharp decline in the short term, finding support near the cost line and fluctuating within a range. However, this represents a weak equilibrium lacking upward momentum.

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