Weak Cost Support for Melamine, This Round of Minor Price Increase May Not Last

February 4th news

I. Recent Market Price Changes

Spot benchmark price: As of February 4, 2026, the spot price of melamine in China was 5712.5 CNY/ton. Daily price increase: It rose by 37.5 CNY/ton compared to the previous day, with a daily price increase of 0.66%.

Recent cumulative price increase: Since January 28, prices have risen from 5,637.5 CNY/ton. After two consecutive increases on January 29 and 30, prices stabilized and then rose again on February 3. Over the past week, prices have cumulatively increased by 75 CNY/ton, representing a price increase of 1.33%.

From an upstream and downstream perspective, this round of "modest growth" is the result of short-term demand meeting long-term excess, and its foundation is not solid.

Upstream (Costs): Support is weak. The price of the main raw material, urea, is soft, and there is no upward pressure on the production cost side. On February 4th, the benchmark price of urea was 1777.50 CNY/ton, a decrease of 0.28% compared to the beginning of the month (1782.50 CNY/ton).

Midstream (Production): High pressure. The fundamental issue is severe overcapacity in the industry—any price increases could easily be suppressed by ample supply.

Downstream (Demand): Short-term driving force. It is mainly supported by the seasonal inventory buildup of the plate industry after the Spring Festival in China, but this demand is temporary.

Simply put: Downstream stockpiling has created a “window” for price increases, but the two major challenges—upstream cost pressures and midstream capacity constraints—mean that the room for further price hikes is limited and unsustainable. The key to understanding market trends lies in whether demand will decline after the current stockpiling phase ends, and whether there will be substantial capacity reductions.

III. Comprehensive Market Analysis

In summary, the price of melamine has achieved a slight increase amid fluctuations, reflecting a certain level of market support. Manufacturers in different regions of China adjust their prices flexibly based on their own inventory, orders, and regional supply and demand conditions, with some raising and others lowering their quotes, indicating that the market is not a one-sided situation. This small increase is a short-term fluctuation. From an industry perspective, the melamine market in China faces a long-term fundamental issue of continuous capacity expansion and overall oversupply, which limits the space for significant price increases.

Overall, in the context of a long-term supply surplus, the current market in China has seen a short-term, regional, and minor price recovery.