This week, the spot price of melamine in China fluctuated downward, with the market focus continuously shifting lower. Data shows that at the beginning of the week, the benchmark price of melamine was 6,337.50 CNY per ton, and by August 18, the price had dropped to 6,212.50 CNY per ton, a cumulative decrease of 1.97% within the week.
Price and Technical Performance on the XianTong Platform
From the trend, the price of melamine in China has been continuously weakening from a high position this Wednesday. On August 11, the price was still at 6337.50 CNY/ton, and then it began to decline continuously, with the price continuously falling. Technically, both the 5-day and 10-day moving averages have turned downward, and the price has been under pressure below the short-term moving averages, forming a bearish pattern, indicating a short-term downward pressure.
Cycle quantile data show that the current melamine price is at the low end of the 10-day cycle, the mid-low end of the 20-day cycle, and the lower end of the annual price range. Analysts believe that short-term valuations are relatively weak, bullish momentum in the market continues to wane, and upward pressure at higher levels is gradually being released.
Raw material support has weakened.
Upstream raw material urea prices have fallen in tandem, further dampening market sentiment. As of August 18, the benchmark price of urea was 1,702.50 CNY per ton, down 3.13% from 1,757.50 CNY per ton at the beginning of the month. The shift in raw material costs has weakened the cost support for melamine, giving companies more room to adjust prices.
Supply and Demand and Market Sentiment
On the demand side, downstream panel and coatings industries are mainly purchasing according to their needs, with insufficient willingness for large-scale restocking, leading to a relatively quiet market trading atmosphere. On the supply side, industry operations remain relatively stable, with ample supply of goods, resulting in a more relaxed supply-demand balance. The sentiment of bearishness in the market is increasing, and the enthusiasm of holders to sell is rising, with quotations continuously offering discounts.
Future Market Outlook
Overall, the weak performance of urea, a short-term raw material, is unlikely to provide strong support. There is no clear expectation of a recovery in downstream demand, and the bearish trend in the technical market is expected to continue. It is anticipated that the melamine market will maintain a weak and volatile pattern in the short term, with the risk of a further decline in prices. Subsequent focus should be on the price fluctuations of upstream urea, adjustments in factory operations, and the follow-up of downstream terminal demand in China.
(Source: Business Headlines)
