June 10 news
This week, the melamine market in China continued to show a sluggish trend, with prices remaining weak. According to data, as of June 10th, the benchmark price for melamine was 6087.50 CNY/ton, a decrease of 0.61% compared to the beginning of the month (6125.00 CNY/ton), and the trading atmosphere in the market was light.
SpotCom Technical Analysis: Trend Weakening, Consolidating at Low Levels
Moving Average and Mean Difference Signals
From the moving average system, the 10-day moving average has been below the 20-day moving average this week, but the 20-day moving average is quickly approaching the 10-day moving average, with the negative average difference continuously narrowing. This indicates that the previous downward trend is slowing down, and the Chinese market is transitioning from a one-sided decline to a phase of low-level fluctuation.
The 10-day moving average slowly declined from approximately 6,130 CNY/ton at the beginning of the week to about 6,110 CNY/ton by the weekend, while the 20-day moving average continued to fall from 6,330 CNY/ton to 6,125 CNY/ton. Prices have consistently remained below both moving averages.
Prices remain in the lower end of the entire cycle, lacking short-term rebound momentum, and the market is in a weak equilibrium following an oversold condition.
Cost Side: Support Remains Weak
Recently, urea prices at the melamine raw material end have remained generally stable, with slight declines observed in some regions. The support provided by production costs to current prices is limited. Meanwhile, the industry’s operating rate has stayed at a moderately high level, and several previously idled units have gradually resumed production. As a result, supply-side pressure in the market persists, and cost factors have yet to provide effective price support. As of June 10, the benchmark price for urea stood at 1,812.50 CNY per ton, down 0.41% from the beginning of this month (1,820.00 CNY per ton).
Supply and Demand: Weak Demand Prevails
On the supply side, the operating rates of melamine enterprises in China are generally not low, and the market supply is sufficient, with some companies accumulating inventory pressure; on the demand side, downstream industries such as boards and coatings have entered the traditional off-season, with insufficient terminal orders, and purchases are mainly based on rigid demand. The market lacks concentrated restocking actions, and in the tug-of-war between supply and demand, weak demand dominates the current cool market atmosphere.
Future Market Outlook
In the short term, the melamine market lacks clear upward drivers, and prices are likely to continue fluctuating at low levels. It is crucial to closely monitor the impact of urea price fluctuations—on the raw material side—as well as any marginal improvements in demand signaled by changes in the operating rates of downstream industries.
