September 1st news
I. Price Trend: Prices Have Stopped Falling and Are Rebounding, Breaking Through the Short-Term Moving Average Resistance
According to the data, the benchmark price of melamine on September 1st was 6175.00 CNY/ton, an increase of 0.41% from 6150.00 CNY/ton at the beginning of last week (early August). From the recent daily trend, after a period of sideways consolidation in the market from August 25th to 28th (with prices ranging between 6150-6162.50 CNY/ton), there was a significant rise on August 31st, with a single-day price increase of 0.20%, successfully rising above the 5-day moving average (around 6165 CNY/ton), indicating strengthened short-term buying power.
Technical Analysis: A short-term golden cross has just appeared, but the long-term moving average is still under pressure.
Based on the core principles of current spot market analysis tools, the technical outlook currently exhibits the following characteristics:
1. Short-term signal turning warmer (moving average crossing above expectation):
Observing the chart, it can be seen that the red 5-day moving average has started to turn upwards, and the price has risen above the cyan 10-day moving average.
Although the 10-day moving average (around 6,158 CNY/ton) is currently slightly below the 20-day moving average (around 6,185 CNY/ton), resulting in a negative "average difference," the gap between the two is rapidly narrowing. If prices can remain above 6,175 CNY/ton next week, the 10-day moving average is expected to cross above the 20-day moving average, forming a "golden cross" signal that indicates the start of an uptrend.
2. Interpretation of Location Indicators:
The current price is at a "low" position compared to the 20-day, 30-day, and one-year levels, indicating that the overall market is still in a bottom consolidation or downward trend, with significant pressure from overhead trapped positions. Analysts believe that the current rise is more of a technical rebound after an oversold condition, rather than a reversal.
III. Cost Side
Urea prices fell: On September 1, the benchmark price of urea was 1715.00 CNY/ton, a decrease of 2.42% month-over-month. As the main upstream raw material for melamine, the decline in urea prices theoretically reduces the production cost support for melamine in China.
In the context of falling raw material prices and slightly rising finished product prices, the profit margins of Chinese manufacturing enterprises have been somewhat restored. This may stimulate the maintenance of operating rates, but it also means that the cost side lacks the driving force to push up melamine prices. The current price increases are more due to downstream restocking demand or manufacturers' willingness to hold prices firm.
IV. Comprehensive Analysis and Strategic Recommendations
This Week’s Conclusion: The melamine market is showing a “resilient rebound” trend. In the short term, prices have risen above the 5-day moving average and are approaching the 10-day moving average, indicating improved transaction activity in some regions and a slight recovery in market sentiment.
Outlook for the Future:
The key focus will be on whether an effective “moving average crossover” (i.e., the 10-day moving average crossing above the 20-day moving average) can be formed early next week. If the price breaks through 6,185 CNY/ton—with volume—(the resistance level of the 20-day moving average), the rebound could gain further momentum. Otherwise, the price is likely to continue oscillating and grinding lower within the 6,150–6,180 CNY/ton range. Given that the long-term moving average system remains in a bearish arrangement, downstream users are advised to adopt a “buy as you go” strategy and avoid accumulating large inventories. Upstream manufacturers can take advantage of this short-term rebound to appropriately sell off some inventory and lock in profits.
