SunSirs: Demand Was Weak, and the Melamine Market Was Running Under Pressure

Price trend

This week, the melamine industry was facing significant supply and demand pressures, with prices continuing to decline and overall market sentiment remaining bearish. As of October 15, the benchmark price of melamine on SunSirs was 5,550.00 RMB/ton, down 0.21% from 5,562.25 RMB/ton last week.

Analysis review

The weak market performance was the result of the combined effects of supply and demand imbalance, weakening cost support and the external environment.

Oversupply: While industry production capacity continued to increase, downstream demand had failed to keep pace, resulting in a low operating rate of 69%. Even if some companies temporarily overhauled, it was difficult to reverse the overall loose supply situation.

Weak demand: The core downstream panel industry was experiencing sluggish performance due to the sluggish real estate market. Furthermore, the market's "buy high, don't buy low" mentality had led to more cautious downstream purchases, resulting in a weak overall buying and selling atmosphere.

Weakened cost support: The price of urea, the main raw material, was in a weak downward trend, insufficiently supporting the cost of melamine and providing room for price declines. As of October 15, the benchmark price of urea on SunSirs was 1,580.00 RMB/ton, down 2.54% from 1,621.25 RMB/ton at the beginning of the month.

Exports were hindered: The EU imposed anti-dumping duties on a number of Chinese companies, making exports more difficult and further exacerbating sales pressure in the domestic market.

Market outlook

Based on information from various sources, the melamine market is unlikely to see any improvement in the short term, and is expected to continue its weak consolidation pattern. Supply and demand remain the core issue, and any price rebound will face significant resistance.

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