Supply and Demand Weak, Minor Fluctuations in the Melamine Market in China

August 5th news

Market Conditions

Recently, the melamine market in China has indeed faced a predicament of being filled with negative factors and low demand, leading to overall pressure and a downward trend. However, in the long term, these negative factors will inevitably have a profound impact on the market. Affected by the dual influence of low demand and oversupply, the price of melamine is showing a downward trend. As of August 5th, the benchmark price of melamine was 5812.50 CNY/ton, a decrease of 0.21% compared to the beginning of the month (5825.00 CNY/ton).

Downstream demand is weak: The downstream industries related to melamine, such as boards and impregnation, have reduced their operating loads, leading to an overall insufficient demand for melamine in China.

The real estate industry, as one of the important application areas of melamine, has been continuously sluggish in China. The new construction area and development investment continue to decline, further weakening market demand.

Upstream raw material prices: The Chinese urea market continues to show a steady but slightly weak trend, with some manufacturers reporting small price decreases, leading to an overall downward shift in the market's transaction focus. This has reduced the production costs for melamine but has not effectively stimulated market demand. As of August 5th, the benchmark price for urea is 1812.50 CNY/ton, unchanged from the beginning of the month.

Currently, the melamine market atmosphere in China is average, with a weak and stable operation. Due to increased supply and weak demand, melamine prices are expected to continue to remain at low levels. In the coming period, as new production capacities are gradually released and downstream demand slowly recovers, the supply and demand relationship in the melamine market is expected to be adjusted. However, in the short term, the market may still face the pressure of oversupply, and the situation of low price levels is unlikely to change.

Inventory Accumulation: As supply increases and demand falls short, inventories of some Chinese enterprises have started to accumulate. This not only raises the operational costs for these companies but also potentially has an adverse effect on subsequent production and sales.

Export Situation is Severe: The export market for melamine also faces severe challenges. On one hand, international market competition is fierce, requiring Chinese products to compete with those from other countries and regions. On the other hand, the complex and ever-changing international trade environment means uncertainties such as trade barriers and technical barriers may affect melamine exports.

Future Outlook for Supply and Demand Adjustment: As new production capacity is gradually released and downstream demand in China slowly recovers (although it remains weak at present), the supply and demand relationship in the melamine market in China is expected to see some adjustment. However, in the short term, the market may still face pressure from oversupply.

Low Price Operation: Affected by increased supply and weak demand, the melamine market price is expected to continue operating at a low level. The specific price trend still needs to be determined based on changes in market dynamics and supply-demand relationships.

In summary, the current melamine market in China is indeed facing challenges such as a glut of negative factors and low demand. However, by strictly controlling production capacity, improving product quality, expanding application areas, and strengthening international cooperation, enterprises can actively respond to market challenges and achieve sustainable development.