Supply Contraction Dominates, Melamine Market Remains Stable with Fluctuations

August 26, News

As of August 26, the benchmark price of melamine was 5675.00 CNY/ton, a decrease of 2.58% compared to the beginning of this month (5825.00 CNY/ton), showing a short-term correction trend.

Looking back at this month's market movement, we witnessed a rebound driven by tight supply conditions. In early August, the national average price (excluding Xinjiang) remained steady around 5,300 CNY per ton. However, starting from the 11th, as several major companies simultaneously shut down for maintenance, industry operating rates plummeted to a nearly three-year low of 44.32%, with daily production dropping sharply by more than 30%. This tightening supply prompted price hikes in certain regional markets, pushing the national average price back up to 5,600 CNY per ton—a gain of 1.41% over the previous period. Nevertheless, the underlying market support factors have recently begun to weaken.

Cost Side:

As of August 26, the benchmark price for urea stood at 1,712.50 CNY per ton, marking a 5.52% decline compared to the beginning of this month (1,812.50 CNY per ton). After peaking at 1,782 CNY per ton earlier in the month, urea prices have since turned downward—down 1.73% from their previous high—and are now exerting less upward pressure on melamine costs. Meanwhile, although downstream demand for board materials has shown a slight recovery, the broader market remains weighed down by sluggishness in the real estate sector, which continues to hinder an overall rebound in demand. Additionally, ongoing adjustments in international tariff policies have further dampened export activity. On the supply side, several maintenance-shuttered plants are scheduled to resume operations toward the end of the month, leading market participants to anticipate a gradual increase in available supply—a development that could put downward pressure on prices.

Overall, the market is expected to show a stalemate pattern in the short term with a mix of bullish and bearish factors, and the mainstream price is likely to remain in the range of 5300-5600 CNY/ton. The subsequent market trend will need to focus on the demand fulfillment during the traditional consumption peak season in September. If downstream demand can be realized as expected, and the price of raw material urea stops falling and starts to rise, then prices may gain new upward momentum. It is recommended that all parties in the industry closely monitor the progress of facility resumption and changes in the demand side, and flexibly adjust their business strategies.