SunSirs: Demand Was Weak, and the Melamine Market Fluctuated Within a Narrow Range

Price trend

Recently, the domestic melamine market has been experiencing a narrow range of fluctuations driven by an imbalance between supply and demand. A mix of bullish and bearish factors has resulted in prices fluctuating within a narrow range with no clear direction.

Overall market prices were at a year-low level. For example, the benchmark price on SunSirs was 5,512.50 RMB/ton as of October 22nd, still down 0.68% from the beginning of the month. The ex-factory price for products produced using the atmospheric pressure process generally ranged from 4,900 to 5,250 RMB/ton.

Analysis review

Local benefits in the short term:

Occasional supply contractions: For example, Sichuan Meifeng (50,000 tonnes capacity) shut down its production facility on October 21, resulting in a slight increase of 100 RMB/ton in its ex-factory price to 5,200 RMB/ton. These planned or unscheduled maintenance incidents at individual companies can provide temporary support to supply and sentiment in certain regions.

Long-term fundamental negatives:

Downstream demand remained weak: Melamine's primary downstream market (approximately 60%) is the building materials industry, such as wood-based panels, which is closely tied to the real estate sector. The sluggish real estate market has directly suppressed actual demand for melamine. This was evident in Anhui Jinhe Industrial's move to lower its ex-factory price by 150 RMB/ton to 5,400 RMB/ton on October 22nd, reflecting the sales pressure manufacturers faced and the strong bargaining power of downstream suppliers.

Weakened cost support: The price of urea, the main raw material, fell month-on-month in the third quarter of 2025. As of October 22, the benchmark price of urea on SunSirs was 1,570.00 RMB/ton, down 3.16% from 1,621.25 RMB/ton at the beginning of the month. This lack of cost support for melamine prices had led to a continued squeeze on the profit margins of melamine companies.

Market outlook

Overall, the narrow fluctuations in the melamine market and the partial benefits brought about by plant shutdowns are less than the result of the fundamental negative effects of long-term overcapacity and weak demand.

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