Trend Slowing Down! Melamine Enters a Volatile Bottoming-Out Cycle

I. Price Review: Highs Decline, Trading in a Narrow Range

This week, the price of high-quality industrial melamine in East China fluctuated within a narrow range, with the price range for the week at 6850-6887.5 CNY/ton. As of May 14, the benchmark price was 6887.5 CNY/ton, a slight increase of 0.18% from the beginning of the month (6875 CNY/ton), overall showing a pattern of "stabilization at a high level with narrow fluctuations."

From a long-term perspective, since mid-February, the price of melamine has experienced a complete cycle of "one-way rise - peak and decline": from mid-February to early April, the price rose continuously from about 5700 CNY/ton, reaching a yearly high of 9675 CNY/ton; after early April, the price dropped rapidly, and as of this week, it has fallen to a mid-low range for the year. The current price is about 28.8% lower than the yearly high, and still 28.1% higher than the yearly low (5375 CNY/ton), placing it at a "mid-low" level.

II. Technical Signals from Xianhuotong: Downtrend Slowing Down, Short-Term Stabilization Expected

1. Moving average and mean difference signals

According to the spot average difference indicator (10-day moving average - 20-day moving average):

The 10-day moving average (red line) remained flat this week, staying around 6875 CNY/ton, nearly overlapping with the spot price. The difference (10-day moving average - 20-day moving average) has been consistently negative, but the gap is continuously narrowing, showing a characteristic of decreasing negativity. This indicates that the rapid downward momentum seen earlier has significantly weakened, and the short term has entered a deceleration phase.

2. Periodic Position Signal

From the perspective of multi-cycle price positioning:

On the 10th, the position has rebounded from the low to the “high,” indicating that the short-term price has broken away from the bottom range and is now forming a temporary support at the current level. The 20-day, 30-day, and 60-day positions remain at the “low” level, suggesting that the medium-term downtrend has not yet been fully reversed and the price is still in the recovery phase. The 90-day and one-year positions are both at the “mid-to-low” level, reflecting that the current price remains relatively low over the medium- to long-term horizon, and the room for further decline has become relatively limited.

Three, Market Logic: A Delicate Balance in the Game of Supply and Demand

1. Supply Side: During the earlier phase of price surges, industry operating rates increased, with some facilities running at full capacity. As a result, market supply rose. Coupled with the gradual delivery of previously placed high-priced orders, the availability of goods in circulation surged, putting downward pressure on prices.

2. Cost End: The prices of upstream urea and liquid ammonia have been weak recently, leading to a weakening in support. Some companies have slightly lowered their quotes in line with the cost reduction, but due to sufficient previous orders, there is still a willingness to maintain prices, which limits the space for significant price drops. As of May 14, the benchmark price of urea is 1837.50 CNY/ton, a decrease of 2% compared to the beginning of this month (1875.00 CNY/ton).

3. Demand Side: The demand from downstream industries such as panels, coatings, and molding plastics remains at a basic level. There is no significant increase in terminal orders, and procurement is mainly on an as-needed basis, lacking the motivation for large-scale stockpiling. Some downstream companies are still digesting their high-priced raw material inventories from earlier periods, showing only moderate acceptance of current prices. The market trading atmosphere is relatively weak, making it difficult to sustain a continuous upward momentum.

4. Outlook for the Future:

Overall, the current melamine market in China is in a phase of "slowing decline and narrow fluctuation," with short-term prices likely to oscillate and form a bottom within the range of 6,800-7,000 CNY per ton. Prices have fallen to the middle-low level of the year, and the willingness of enterprises to hold prices firm near their cost lines has increased; the 10-day moving average has stabilized, and there is insufficient downward momentum in the short term.

(Source: )