SunSirs: Supply Contraction Led to Stable but Fluctuating Melamine Market

Price trend

As of August 26, the benchmark price of melamine on SunSirs was 5,675.00 RMB/ton, down 2.58% from the beginning of this month (5,825.00 RMB/ton), showing a short-term correction trend.

Analysis review

Looking back at this month's market trends, we can see a rebound driven by tight supply. In early August, the national average price (excluding Xinjiang) remained around 5,300 RMB/ton. Since the 11th, due to the centralized shutdown and maintenance of many enterprises, the industry's operating rate has plummeted to 44.32%, the lowest level in nearly three years. Daily output has plummeted by over 30%. Tight supply has driven price increases in some regions, leading to a rebound in the national average price to 5,600 RMB/ton, a 1.41% increase. However, market support has recently weakened.

Cost side:

As of August 26th, the benchmark price of urea on SunSirs was 1,712.50 RMB/ton, down 5.52% from 1,812.50 RMB/ton at the beginning of the month. After reaching 1,782 RMB/ton, it began to decline, down 1.73% from its peak earlier this month, weakening the cost support for melamine. Meanwhile, while downstream demand for flat panels has seen a slight recovery, the sluggish real estate sector continued to constrain overall demand recovery. Furthermore, adjustments to international tariffs were impacting exports, preventing robust demand growth. Furthermore, with some facilities scheduled to restart after maintenance near the end of the month, the market anticipated a gradual recovery in supply, putting pressure on prices.

Market outlook

Overall, the market is facing a mix of bullish and bearish factors in the short term, with mainstream prices expected to remain stagnant in the 5,300-5,600 RMB/ton range. Future market trends will focus on demand fulfillment during September, the traditional peak consumption season. If downstream demand continues to increase as expected and raw material urea prices rebound, prices are expected to gain new upward momentum. Industry stakeholders are advised to closely monitor plant resumption progress and demand fluctuations, and flexibly adjust operating strategies.

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