This week, the melamine market did show tentative signs of an increase against the backdrop of an overall downturn, but the price trends in different regions and enterprises showed significant differentiation. As of November 18th, the benchmark price of melamine in Shengyi Society was 5412.50 yuan/ton, an increase of 0.91% compared to last week (5375.50 yuan/ton).
| Melamine |
Partial price increase: On November 18th, the ex factory quotation in Chongqing was increased by 50 yuan/ton to 5300 yuan/ton. This trend is widely interpreted by the market as a tentative increase, reflecting the possibility of short-term improvement in supply and demand in the southwest market.
Market differentiation: In contrast, on November 17th, major manufacturers in Shandong lowered their factory quotes by 100 yuan/ton to 5200 yuan/ton. This situation of “mixed ups and downs” indicates that this price increase is not a nationwide general rise, but a regional market behavior.
This local trial of a small increase needs to be viewed in the context of the industry’s long-term weakness:
1. Rigid support at the cost end:
The main raw material of melamine, urea, has been at a relatively high price during the same period. As of November 18th, the benchmark price of urea in Shengyi Society was 1630.00 yuan/ton, an increase of 1.40% compared to the beginning of this month (1607.50 yuan/ton). Especially in the southwest region, as a concentrated area for natural gas to urea production, production costs remain high and even have expectations of rising due to the tight supply of natural gas in winter and the need to ensure civilian use.
Long term supply-demand imbalance: Authoritative industry analysis points out that the melamine industry is facing serious supply-demand contradictions. On the supply side, production capacity continues to expand; On the demand side, nearly 60% of the demand is tied to the weak real estate and building materials markets, resulting in insufficient overall demand support. This puts the market in a long-term downward trend.
Short term volatility nature: Therefore, the current tentative rise should be seen more as a short-term and regional price correction. It indicates that some companies are willing to tentatively raise prices under cost pressure or short-term order support, but this has not changed the overall pattern of oversupply in the market.
In summary, there have been signs of a “tentative small increase” in the melamine market recently, mainly reflected in the price adjustment behavior of individual enterprises in the southwest region. However, due to regional market differentiation and the lack of fundamental improvement in long-term supply and demand fundamentals, the sustainability of this price increase remains to be observed. The overall market is still in the stage of bottom oscillation and seeking new equilibrium.
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