September 7 news
I. Price Trends: Benchmark prices show moderate upward movement, while spot prices remain largely stable with minor fluctuations.
As of September 7, the benchmark price of melamine was 6,212.50 CNY/ton, an increase of 0.61% from the beginning of the month (6,175.00 CNY/ton). Looking at the daily prices for this week, the price remained stable at 6,200 CNY/ton from September 1 to 4, and rose to 6,212.50 CNY/ton on September 5 and 6, with a daily change rate of 0.00%, except for a small increase of 0.20% on September 4. Overall, the performance was characterized by a narrow range consolidation with a slight upward trend, described as "largely stable with minor movements."
II. Technical Signals: Moving averages point in different directions; the trend is judged as “volatile.”
Based on the core principles of spot market analysis tools, a moving average crossing upwards (from negative to positive) is a signal for the start of an increase, while a moving average crossing downwards (from positive to negative) is a signal for a decline or adjustment.
Analysts believe that the three mean differences do not completely align in direction, failing to meet the clear trend determination criteria; therefore, the current price trend is classified as fluctuating.
From a historical perspective, the current price is at the median level in both the 60-day and 90-day cycles, with relatively balanced room for increases and decreases; in the 1-year cycle, it is at a low level, indicating limited downward space and some support for the price.
3. Supply and Demand Fundamental Analysis
1. Supply side: Operating rates are at a medium-low level, with frequent plant dynamics.
This week, China's melamine industry capacity utilization rate remained at a low to medium level of around 52% to 54%. In terms of facilities, previously shut-down units such as those at Sichuan Yulong and Shaanxi Longhua have gradually resumed production, but the shutdown of Junhua's Line 4 has limited the increase in market supply. Additionally, overseas, Germany's SKW Piesteritz has taken its 80,000 tons/year facility offline, tightening the available supply in the European region, which is expected to provide some support for exports to China.
Overall, the contraction in supply provides a bottom support for prices, but the increased production from restarted facilities also limits the upside potential.
2. Cost Side: Raw material urea continues to rise, strengthening cost support.
As of September 7, the benchmark price of urea was 1722.50 CNY/ton, an increase of 0.44% from the beginning of the month (1715.00 CNY/ton). The continuous rise in the price of urea, a raw material, is one of the core factors supporting the recent price of melamine. Urea prices have been driven higher by firm coal prices and international price trends, passing on the cost pressure to melamine.
It’s worth noting that the actual demand for urea has not shown any significant improvement. If urea prices subsequently slow down their upward trend, the cost-support effect could weaken.
3. Demand Side: Terminal demand is flat, and there’s clear resistance to high prices.
Downstream demand continues to show a weak trend. Domestic demand for plates is constrained by the sluggish real estate market, and the industrial sector is only maintaining essential purchases. Downstream consumers are strongly resistant to "high-priced" goods. Currently, it is the off-season for plates, with limited inventory buildup. The market as a whole is in a state of supply and demand competition. Supply contraction and rising costs provide price support, but weak demand limits the upside potential, and quotations remain flexible.
4. Comprehensive Outlook
In the short term, the melamine market is likely to continue its volatile consolidation pattern: raw material urea prices are rising, and industry operations are at a medium to low level; the one-year price position is relatively low, limiting the downward space. Terminal demand is weak, and downstream resistance to high prices is strong; no clear trend direction has yet been established.
Key areas to watch going forward: The price trend of raw material urea, changes in facility utilization rates, and whether the 10-day moving average can form a clear “moving average crossover” signal above the 20-day moving average. If such a signal emerges, it could signal the start of an upward trend; conversely, under conditions of supply-demand stalemate, the market will likely continue to fluctuate within a narrow range.
