October 21st News
This week, the melamine market in China continued its downward trend, with prices steadily declining. According to monitoring, on October 21, the benchmark price of melamine was reported at 6,175.00 CNY/ton, a decrease of 2.37% from 6,325.00 CNY/ton at the beginning of the month.
Urea, the upstream raw material, has also weakened in tandem. On October 21, the benchmark urea price stood at RMB 1,740.00 per tonne, down 2.25% cumulatively for the month, as cost‑side support continues to ease.
Technical Analysis
From the spot market trend chart, during the period from October 14 to 20, the melamine price curve consistently remained below all moving averages. The prices, along with the 5-day, 10-day, and 20-day moving averages, showed a synchronized downward trend. The 10-day moving average remained consistently below the 20-day moving average, with the difference maintaining a negative value, forming a typical bearish pattern. There was no signal of a moving average crossover, indicating a clear downward trend.
From a price percentile perspective, the 10-day, 20-day, and 30-day cycles are all in a low position, with the 60-day cycle also retreating to a low level. Only the 90-day cycle remains at a mid-level. The high levels of long-term cycles are gradually being digested, and short-term price pressure is evident. The daily price decrease maintains a steady decline of -0.40%, indicating a lack of rebound momentum in the market.
Fundamental Analysis
Supply side: There is ample spot supply, and companies in China are facing relatively high pressure to ship goods.
China's melamine industry is maintaining a relatively high level of operation, with previously shut-down facilities resuming production, ensuring ample spot supply in the market. Some manufacturers have accumulated inventory and are showing a strong willingness to sell at reduced prices. Regional factory quotations are being gradually lowered, and the emergence of low-priced goods is further dragging down the overall price level.
Cost Side: Urea Weakens in Sync, Cost Support Eases
The upstream urea market in China is operating weakly, with a relatively loose supply and demand situation for urea. Industrial and agricultural demand has weakened, leading to a continuous decline in prices. The production cost of melamine has also decreased as a result. However, the price of melamine products is falling even faster, and the reduction in costs has not offset the negative impact of reduced demand; instead, it has compressed the profit margins of manufacturing enterprises.
Demand Side: As the low season for the downstream panel industry in China approaches, purchasing is becoming more cautious.
Melamine's main downstream sectors are the board and decorative panel industries. The traditional peak season of "golden September and silver October" did not meet expectations, with insufficient terminal orders and low operating rates at downstream board factories. Downstream companies maintain rigid demand procurement, taking supplies as needed and unwilling to stock up in advance. The market trading atmosphere is weak, with inadequate buying interest, which is the core factor suppressing the market trend.
Outlook for the Future Market
In the short term, there is little likelihood of a strong upward drive for urea in the upstream sector, with weak support from the cost side; the downstream panel industry will gradually enter the winter off-season, making it difficult for terminal demand to significantly recover. Coupled with ample spot supply, the melamine market may maintain a weak and volatile pattern, with the price level still having a small possibility of declining. It is necessary to continuously monitor the operating rates of downstream panel production, the trend of raw material urea, and changes in export orders.
