September 15th, according to reports
I. Price Trends: The center of gravity is shifting upward, while the end remains flat.
Entering the second week of September (September 7-14), the melamine market in China showed a "first rise then stabilize" trend. As of September 15, the benchmark price of melamine was reported at 6,250.00 CNY/ton, an increase of 1.21% from the beginning of the month (6,175.00 CNY/ton).
From the trend this week, the price on September 7 was 6212.50 CNY/ton, and then gradually increased over the following trading days. On September 10, it broke through to 6250 CNY/ton and entered a stable period. From September 11 to 14, it remained steady at 6250.00 CNY/ton for four consecutive trading days, with the daily change rate returning to zero. The overall market performance was stable, with the price center shifting slightly higher compared to the previous period.
2. Moving Average System: Bullish alignment, clear signals of an upward trend
From the price and moving average chart, it can be observed that this week, the moving averages of various periods show a clear bullish divergence: the 5-day moving average is at the top, followed by the 10-day and 20-day moving averages in descending order, all maintaining an upward slope.
The current 10-day moving average continues to run above the 20-day moving average, with a positive and expanding difference, which is typical of a continuation period after a moving average crossover. This indicates that the initial signal for a price increase has been confirmed, and the short-term bulls are in control. However, it is worth noting that in recent days, the current price moving average has been closely aligned and flat with the 5-day moving average, indicating a short-term stalemate at the 6250 CNY/ton level.
III. Position and Cycle: Short- to Medium-Term at High Levels, Long Term Still in the Mid-to-Low Range
According to the monitoring of location data, on September 14, melamine was at “high levels” at the 10-day, 20-day, and 30-day positions; at the 60-day and 90-day positions, it was at “moderately high levels”; and at the one-year position, it remained at “moderately low levels.”
This indicates that the current round of increases mainly reflects short to medium-term strength, with prices reaching the upper limit of the recent range. However, in the longer annual cycle, the current price has not yet reached historical highs, and there is still support from previous lows below.
Four, Cost-Driven: Surge in Urea Prices Provides Support
Melamine's upstream raw material, urea, showed a stronger performance this month. On September 15, the benchmark price of urea was 1,800.00 CNY/ton, a significant increase of 4.96% from the beginning of the month (1,715.00 CNY/ton), with the price increase notably higher than that of melamine (1.21%).
The rapid increase in the price of raw material urea has significantly pushed up the melamine market from the cost side, which is the core logic behind the rise and firm maintenance of melamine prices this week in China.
5. Outlook for the Future Market
Overall, driven by the rise in urea costs, melamine prices increased this week, with the moving average system showing a bullish pattern, indicating a stable market operation in China.
In the short term, under the support of cost and the upward inertia of the moving average, melamine is expected to maintain a high-level consolidation; however, attention should be paid to the change in momentum after the price remains flat for a consecutive period. If the difference between the 10-day moving average and the 20-day moving average narrows (the gap between the averages contracts), one should be cautious about the adjustment signal brought by the downward crossover of the moving averages. In the medium to long term, as the current position is still at a mid-to-low level, the overall market valuation does not show extreme overvaluation. The subsequent trend will depend more on the sustainability of the raw material end and the follow-up situation of downstream demand.
