This week, the domestic melamine market stabilized and remained stagnant. As of July 28th, the benchmark price of melamine in Shengyi Society was 5825.00 yuan/ton, a decrease of 1.06% compared to the beginning of this month (5887.50 yuan/ton).
| Melamine |
Recently, the domestic melamine market has shown a weak consolidation trend, and there are multiple factors that contribute to the price game. From the perspective of supply and demand pattern, upstream production enterprises stimulate market transactions by actively lowering their quotations (with low-end prices reaching the range of 5200-5400 yuan/ton), coupled with periodic replenishment of international orders, effectively digesting enterprise inventory levels and gradually reducing some low-priced sources to a reasonable range.
The decline in urea raw material prices has weakened cost support, coupled with the shortened order cycle of production enterprises, jointly suppressing the upward space of melamine prices. There is a strong wait-and-see sentiment in downstream demand, and processing companies generally adopt on-demand procurement strategies due to sufficient low-priced inventory and low operating rates in the early stage, leading to a “price sensitive” stalemate in the market. Under multiple factors, the melamine market is expected to maintain a weak balance in the short term, and the subsequent trend is expected to be weak.
The utilization rate of melamine production capacity has slightly increased this week. Under the support of orders on hand, the current shipping pressure of production enterprises is limited. But as orders are gradually delivered, market supply is expected to increase. Downstream resistance to high priced raw materials is evident, with low acceptance. To maintain shipments, manufacturers may need to adjust their pricing strategies and mindset.
The mainstream price of urea in the current market remains stable, but prices in some areas have loosened and declined. As of July 28th, the benchmark price of urea in Shengyi Society was 1825.00 yuan/ton, an increase of 0.11% compared to the beginning of this month (1823.00 yuan/ton). The urea market has entered a wait-and-see stalemate. Although there is a demand for replenishment downstream, due to a cautious attitude, small order follow-up is mainly focused on. The pressure on the supply side remains unabated, with Nissan maintaining a high level. At the same time, the inverted international prices and weakened coal expectations have intensified the bearish sentiment in the market. However, with the support of pending orders from the factory and low social inventory, prices have temporarily stabilized. Under the game of various forces, it is expected that the short-term market will maintain a volatile and weak trend.
Overall, the melamine market lacks strong positive support. In the short term, relying on existing advance orders, the market will maintain a stalemate. However, as the orders are gradually digested, the supply and demand sides will once again engage in a game. The future price trend will depend on the dynamic changes in supply and demand, fluctuations in raw material costs, and the evolution of market participants’ mentality.
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