This week, the melamine market is indeed in a sluggish state, showing an overall pattern of weak supply and demand, and prices are under pressure to decline. As of September 16th, the benchmark price of melamine in Shengyi Society was 5650.00 yuan/ton, a decrease of 0.22% compared to the beginning of this month (5662.50 yuan/ton).
| Melamine |
From the perspective of the regional market, the ex factory quotation in the East China region is based on 5130-5350 yuan/ton, and it is clearly stated that “some can be negotiated”, indicating that there is room for discounts in actual transactions; Southwest region (Chongqing Jianfeng) quoted 5450 yuan/ton; The price in North China is around 5125 yuan/ton.
The price of upstream raw material urea is also decreasing. As of September 16th, the benchmark price of urea in Shengyi Society was 1665.00 yuan/ton, a decrease of 2.77% compared to the beginning of this month (1712.50 yuan/ton). This weakens the cost support for melamine.
Supply side:
High fluctuation of capacity utilization rate: Although the industry capacity utilization rate on September 4th decreased by 3.6 percentage points to 55.38% compared to the previous period (58.98%), it still remained relatively high overall. And it is expected that the capacity utilization rate and weekly output will still slightly increase this week (the week of September 15th). Enterprise inventory pressure: Under the combined effect of high operating rates and sluggish demand, some enterprises are facing the pressure of inventory accumulation.
Demand side:
The sustained weakness in downstream demand is the main reason for the sluggish market:
Weak willingness to purchase: Downstream enterprises mainly purchase on demand, with few new transactions and a weak buying and selling atmosphere. As prices continue to decline, it further suppresses downstream purchasing enthusiasm.
The terminal industry is sluggish: The main consumer areas of melamine, such as artificial boards, coatings, and molded plastics, are closely related to the real estate industry. The current real estate industry continues to be sluggish, resulting in flat demand in these terminal industries, which in turn reduces the demand for melamine. For example, from January to July this year, the national production of artificial board surface decorative panels decreased by 7.64% year-on-year.
market outlook
It is expected that negative factors in the melamine market will still prevail in the short term, and the market is likely to continue its weak trend. If there is no significant improvement on the demand side, under sales pressure, it cannot be ruled out that companies may still experience price declines. The core contradiction in the market lies in the imbalance between high supply levels and weak downstream demand. We need to pay attention to whether downstream construction after the end of autumn can bring about a rebound in demand.
In summary, the current melamine market is mainly characterized by a downward trend in prices, significant supply pressure, sustained weak demand, and difficult profitability for enterprises. It is difficult for the market to show significant improvement in the short term, and the stabilization and rebound of prices may require a greater contraction of supply or substantial improvement in downstream demand.
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