Supply contraction dominates, melamine market remains stable with fluctuations

As of August 26th, the benchmark price of melamine in Shengyi Society was 5675.00 yuan/ton, a decrease of 2.58% compared to the beginning of this month (5825.00 yuan/ton), showing a short-term correction trend.

Looking back at this month’s trend, the market has experienced a rebound driven by tight supply. In early August, the national average price (excluding Xinjiang) remained around 5300 yuan/ton. Starting from the 11th, due to the concentrated parking and maintenance of multiple enterprises, the industry’s operating rate has plummeted to the lowest level in nearly three years, 44.32%, and daily production has decreased significantly by more than 30%. The tight supply has pushed up prices in some regions, driving the national average price to rebound to 5600 yuan/ton, with a stage increase of 1.41%. However, market support factors have recently weakened.
Cost side:
As of August 26th, the benchmark price of urea in Shengyi Society was 1712.50 yuan/ton, a decrease of 5.52% compared to the beginning of this month (1812.50 yuan/ton). After reaching 1782 yuan/ton, it turned downward, a decrease of 1.73% from the high point in the first ten days, weakening the cost support for melamine. On the other hand, although downstream demand for sheet metal has slightly rebounded, the sluggish real estate industry still hinders the overall demand recovery. In addition, the adjustment of international tariff policies has affected exports, and there has been no strong growth on the demand side. In addition, some maintenance facilities are scheduled to restart towards the end of the month, and the market expects supply to gradually rebound, putting pressure on prices.
Overall, long and short factors are intertwined in the market in the short term, and it is expected that the mainstream price will show a stalemate in the range of 5300-5600 yuan/ton. The follow-up market trend needs to focus on the demand fulfillment during the traditional consumption peak season in September. If downstream demand can increase as scheduled and the price of raw material urea stops falling and rebounds, then prices are expected to gain new upward momentum. It is recommended that all parties in the industry closely monitor the progress of equipment resumption and changes in demand, and flexibly adjust their business strategies.