Weak Demand: Melamine Market Pressured Amid Challenges

October 15, news

This week, the melamine industry in China is facing significant supply and demand pressures, with prices continuing to decline and overall market sentiment being bearish. As of October 15, the benchmark price of melamine was 5,550.00 CNY/ton, a decrease of 0.21% compared to last week (5,562.25 CNY/ton).

The current weak market performance is the result of a combination of supply-demand imbalances, weakening cost support, and external factors.

Oversupply: The industry's production capacity continues to increase, but downstream demand has not kept pace, resulting in a low operating rate of 69% for enterprises. Even temporary maintenance by some companies is unlikely to change the overall situation of supply surplus.

Weak Demand: The core downstream plate industry is struggling due to the sluggish real estate market. Meanwhile, the market's "buy-high-but-not-buy-low" mentality has led to more cautious purchasing by downstream buyers, resulting in an overall weak trading atmosphere.

Weakening Cost Support: The price of urea, the primary raw material, is trending downward, providing insufficient cost support for melamine and creating room for further price declines. As of October 15, the benchmark price for urea stood at 1,580.00 CNY per ton, a 2.54% decrease compared to the beginning of this month (1,621.25 CNY per ton).

Export Obstructed: The EU has imposed anti-dumping duties on multiple Chinese companies, increasing the difficulty of exports and further exacerbating the sales pressure in the Chinese market.

Based on the comprehensive information, it is difficult for the melamine market to improve in the short term, and the market is expected to continue a weak consolidation pattern. The supply-demand contradiction remains the core issue, and any price rebound will face significant resistance.