Overall, the domestic melamine market has continued to operate weakly recently. On November 5th, the benchmark price of melamine in Shengyi Society was 5387.50 yuan/ton, a decrease of 0.92% compared to the beginning of this month (5437.50 yuan/ton), which is at the low level of the price range for the year. Despite the flexible price adjustments of individual companies, it is difficult to reverse the overall decline of the market.
| Melamine |
The current market price has slightly declined compared to the beginning of the month, indicating downward pressure. However, the “flexible changes” in the market are also reflected in this. Taking Hebei Xinji Jiuyuan Chemical as an example, although it raised its quotation by 50 yuan/ton to 5350 yuan/ton on November 5th, the actual transaction is still “negotiable”. This reflects that manufacturers are trying to tentatively raise prices, but due to the lack of solid market demand support, the final transaction is often accompanied by discounts. This phenomenon of “clear stability but hidden decline” or “flexible negotiation” is a true reflection of the current market.
Supply side:
The domestic production capacity of melamine is already at a high level. Although the industry’s operating rate remains at around 70%, social inventory is still high and the market supply is sufficient.
Demand side:
The demand for melamine is closely related to the prosperity of the real estate industry, with over half of its production used for manufacturing boards. The current adjustment in the real estate market has directly led to a decline in orders for downstream panel companies, and the procurement of raw material melamine is mainly based on small orders for essential needs, which is difficult to support a price rebound.
Cost side:
The price of urea, as the main raw material, is also running at a low level during the same period. As of November 5th, the benchmark price of urea in Shengyi Society was 1585.00 yuan/ton, a decrease of 1.4% compared to the beginning of this month (1607.50 yuan/ton). This has led to a decrease in the production cost line of melamine, losing a key supporting factor from the cost side, further exacerbating the bearish sentiment in the market.
Overall, against the backdrop of sufficient supply but sluggish demand, the melamine market is unlikely to see any improvement in the short term. It is expected that the market will mainly consolidate weakly, and there may still be a risk of a downward trend in the price center. Any ‘flexible changes’ in the market will be local and temporary, and cannot form a broad upward trend.
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