Supply Contraction Dominates, Melamine Market Stably Fluctuates

August 26, News

As of August 26, the benchmark price of melamine was 5,675.00 CNY/ton, a decrease of 2.58% compared to the beginning of this month (5,825.00 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, urea prices have since turned downward, dropping by 1.73% from their earlier high—thus weakening cost support for melamine. Meanwhile, although downstream panelboard demand 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 are affecting export activities, further limiting demand growth. 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 supply—a development expected to put downward pressure on prices.

Overall, the market is expected to show a stalemate pattern in the range of 5300-5600 CNY/ton in the short term, with a mix of bullish and bearish factors. The subsequent market trend will need to focus on the fulfillment of demand during the traditional consumption peak season in September. If downstream demand can be released as expected and the price of urea, a raw material, 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.