Weak Supply and Demand Continues to Affect the Melamine Market

September 23, News

Entering late September 2025, the Chinese melamine market did not usher in the expected "Golden September" performance but instead continued the previous weak and declining trend, with an overall bearish market atmosphere and low trading activity.

Market Overview:

Price Overview: As of September 23, the benchmark price for melamine stood at 5,512.50 CNY per ton, representing a 2.65% decrease compared to the beginning of this month (5,662.50 CNY per ton). For some manufacturers aiming to secure shipments, spot transaction prices are negotiable, with the overall price trend continuing to move downward.

Trading atmosphere: Downstream buyers and traders show extremely low purchasing enthusiasm, generally holding a "buy on rising prices, not on falling ones" wait-and-see attitude. New orders in the market are mostly sporadic small transactions, which are difficult to form effective support. The actual trading within the market is cold, presenting a typical characteristic of "prices but no market."

Supply Side:

Despite some individual units experiencing short-term shutdowns or maintenance, the overall operating rate of China's melamine enterprises remained at a relatively high level of 65% to 70%. This means that the spot supply in the market was very abundant.

Due to the shipping speed being much slower than the production speed, the inventory level of manufacturing enterprises has gradually climbed, and some manufacturers are facing certain inventory pressure. To alleviate the inventory and capital pressure, manufacturers have to attract orders by lowering prices or increasing discounts, thereby exacerbating the price decline.

Demand Side:

The main consumption areas of melamine are boards, coatings, and molding powders, among which the board industry is highly related to the prosperity of the real estate sector. Currently, the real estate industry in China is still in an adjustment period, with limited driving effects on new home decoration and furniture consumption, leading to a persistently weak demand for melamine from board manufacturers.

The slowdown in overseas market economic growth has not significantly boosted the import demand for melamine-containing products (such as laminates, tableware, etc.) from China, and the diversion effect of the export market on Chinese demand has weakened.

In the face of a continuously declining market, downstream customers generally believe that prices have not yet hit bottom, and therefore their purchasing strategies are extremely cautious, mainly focusing on depleting existing inventories and waiting for clearer signals of a bottom, which further exacerbates the demand side

Cost End:

The urea market is in a stalemate: as of September 22, the benchmark price for urea is 1670.00 CNY/ton, which has decreased by 2.48% compared to the beginning of this month (1712.50 CNY/ton). As a key raw material, the Chinese urea market itself is also in a state of supply and demand competition, with prices fluctuating narrowly; there has been neither a significant increase to provide strong cost support for melamine, nor a sharp decline to bring about a notable improvement in production profits. This "weak stability" in the raw material situation has deprived the melamine price of a critical support anchor.

Market Sentiment: Currently, the sentiment among market participants is generally pessimistic. Producers lack confidence in the future market and are mainly focusing on active shipments; while intermediaries and downstream factories mostly have a bearish outlook on the future, with low willingness to operate.

In summary, the "continued weakness" in the melamine market this week is an inevitable result of the combined effects of high supply, weak demand, and low costs. The market is going through a difficult rebalancing process, and it will be necessary to closely monitor the trend of urea prices from upstream and the adjustment of operating rates at melamine factories.