Supply Contraction Dominates, Melamine Prices Continue to Rise in China

August 19, News

Recently, the market price of melamine has entered a continuous rising mode. As of August 19th, the benchmark price of melamine in China was 5737.50 CNY/ton, an increase of 1.07% compared to last week (5700.00 CNY/ton). Although the current price is still lower than the same period last year, the continuously expanding month-on-month growth rate indicates a steady upward trend in the market price.

In early August, the operating load of the melamine industry in China briefly recovered to around 50%, but due to the continuous high temperatures, facilities in major production areas such as Sichuan and Anhui were forced to reduce their loads. The current overall load rate of the industry has now dropped back to 40%. The supply contraction has led to a sustained low level of market inventory. Some manufacturers have adopted a strategy of controlling order quantities, which has pushed prices up.

Looking at regional trends: In the northern region, transaction prices have stabilized at around 6,000 CNY/ton; in central and eastern China, the mainstream price range is between 5,700 and 5,900 CNY/ton. Meanwhile, the southwestern region has seen prices rise to 6,100 CNY/ton due to constrained local supply. In contrast, the Xinjiang region, limited by transportation constraints, is experiencing a separate market dynamic, with transaction prices fluctuating narrowly within the 5,000–5,400 CNY/ton range.

Urea prices are expected to maintain a fluctuating pattern within a narrow range. As of August 19, the benchmark price for urea is 1,766.25 CNY/ton, a decrease of 2.55% from the beginning of the month (1,812.50 CNY/ton). The melamine market continues to show a warming trend, driven by supply contraction. Although there is no strong driving force at the raw material end, the stable cost support from urea remains significant. Coupled with the ongoing low operating rates in the industry, it is expected that the upward trend in melamine prices will continue.

Overall, the current melamine market in China is still dominated by three major positive factors: support from export advance orders, a decline in the industry's operating rate to 40%, and a significant cost floor effect of raw materials, all of which reinforce manufacturers' determination to maintain prices. Although the terminal board industry is slowing down procurement due to high costs, the shortage of spot supply remains a short-term issue (even with fewer maintenance periods, the low operating rate continues to have an impact). Coupled with the market's "buying on rising" mentality, leading companies are actively maintaining prices. It is expected that under the short-term tight balance of supply and demand, prices will continue to rise, and there are no signs of relief for the supply gap.