Market price:
| Melamine |
The current price performance of the melamine market can be summarized as “flexible fluctuations under weak consolidation.” As of October 10, the benchmark price of melamine on Business Society was 5,562.50 yuan/ton, up 0.22% from the beginning of the month (5,550.00 yuan/ton). This price remains relatively low compared to the year-to-date and recent years. However, the actual market transaction price range is extremely wide, with the lower end of negotiations potentially dropping as low as 5,050 yuan/ton.
This reflects a situation where “artificially high” prices coexist with the reality of “hidden reductions.” High-end quotations more reflect the price-supporting intentions of major production enterprises, while low-end transactions reveal weak real demand and strong bargaining power downstream.
The short-term flexible price increases are primarily driven not by strong demand but by proactive supply contraction and the marginal support of cost lines. When some companies reduce production due to losses, leading to temporary localized supply tightness, prices exhibit tentative rises. However, these price increases lack a solid foundation, and once prices rebound to a certain level, they face downward pressure from hedging positions and traders eager to liquidate their holdings, resulting in weak upward momentum.
Supply side:
The supply side serves as the most crucial stabilizer in the current market, yet it is also fraught with constraints. With an industry operating rate of 50%-55%, far below healthy levels, this situation is not a voluntary choice by enterprises but rather the combined effect of “passive shutdowns” and “active price maintenance.” Some high-cost, outdated facilities, due to persistent “price-cost inversion” (theoretical losses ranging from 100-200 yuan/ton), can no longer sustain production and have been forced to exit. Meanwhile, leading companies have consciously reduced their operating loads and scheduled centralized maintenance to regulate market supply, aiming to reverse the supply-demand balance—a strategic approach to “production cuts for price stabilization.”.
The biggest pressure on the supply side stems from high factory inventories. Inventory days are generally around 15-20, far exceeding the safety threshold, which acts like a heavy burden on production enterprises, straining their cash flow and testing their pricing confidence. Meanwhile, the urea market, a key raw material, continues to decline due to its own supply-demand imbalance, depriving melamine of a critical cost support. This has consistently squeezed the profit margins of production enterprises, pushing them to the brink of profitability.
Demand side:
The demand side is the weakest link in the current market, with its sluggishness being structural and widespread. The primary downstream industry of melamine—panel and coating sectors—is closely tied to the prosperity of the real estate construction industry. The real estate sector remains in a deep adjustment period, with continuous declines in newly started and ongoing construction areas, directly leading to a contraction in the rigid demand for melamine. Downstream factories themselves face insufficient orders, with operating rates significantly dropping year-on-year, resulting in extremely low procurement willingness for raw materials.
Downstream customers have generally adopted a “low inventory” operational strategy and are generally bearish or cautious about future market conditions. Their purchasing behavior follows a rigid “buy as needed” model, with small single orders and extreme price sensitivity. This results in an inability to form effective, sustained market demand pull.
The international market demand is also sluggish, and the competition for low-cost products from the Middle East and other regions is intensifying, resulting in a significant year-on-year decline in the total export volume this year. This forces a portion of the production originally intended for export to be converted to domestic sales, further exacerbating the supply pressure in the domestic market and forming a vicious competition cycle.
Looking ahead to the future, the melamine market will be in a continuous game of “weak reality” and “strong expectations”.
Short term trend (within the next month): It is expected that the market will continue the pattern of “bottom oscillation”. The price center of gravity is difficult to effectively increase and is more likely to fluctuate widely within the current low range. The upward space will be firmly blocked by high inventory and weak demand; The downward space will be supported by companies’ losses and willingness to reduce production. Any price rebound will be short-lived and unsustainable.
In summary, the melamine market after October 2025 is in a difficult bottoming stage. Market participants should abandon their illusions of a unilateral surge and instead adapt to seeking opportunities amidst volatility. In terms of operation, the purchaser should maintain a low inventory and small batch strategy; The sales party should focus on reducing inventory and maintaining cash flow as the core tasks. Closely monitoring changes in inventory, costs, and macro policies will be the key to grasping the next stage of the market.
| http://www.lubonchem.com/ |