Market Review for 2025: Volatile Downtrend with Oversold Recovery in the Final Quarter
| Melamine |
In 2025, the melamine market exhibited an overall pattern of “declining first and then rising, with a year-on-year price drop,” accompanied by a significant downward shift in the price range.
1. High opening at the beginning of the year, trend weakening: At the start of the year (January 1st), prices were at a relatively high level of 6322.50, but the upward momentum weakened quickly, soon turning into a decline.
2. The prolonged downtrend: Since February, prices entered a nearly three-quarter-long one-sided decline. Although there were brief consolidations during this period, the downward trend persisted, reaching an annual low of 5,412.50 by November 17, marking a cumulative drop of 14.39% from the year’s peak. This extended decline primarily reflected:
Supply pressure: The industry may face challenges due to increased production capacity or higher operating rates.
Weak demand: The demand in key downstream industries such as steel plates and coatings (closely linked to real estate) remains sluggish, leading to cautious procurement.
Cost and Market Sentiment: Fluctuations in the raw material market and heightened bearish expectations have intensified the downward momentum in prices.
3. Significant rebound at year-end: After hitting the bottom, the market staged a “V-shaped” recovery over more than a month before the year-end, surging to 5,675.00 by December 23, rebounding approximately 4.85% from the lowest point. This indicates:
The price has reached a strong support level: around 5412.50, which may have hit the cost line or psychological bottom for most manufacturers, triggering reluctance to sell or maintenance shutdowns.
Short-term positive stimulus: boosted by factors such as plant shutdowns, potential downstream pre-holiday inventory replenishment, short-term increases in export orders, or rising upstream raw material prices.
Annual Summary: Despite a significant rebound in late December, the closing price of 2025 (5675.00) still fell by 10.24% compared to the beginning of the year, indicating that bearish forces dominated the market throughout the year, with the overall market undergoing a process of bottom-seeking and center-of-gravity decline.
The price trend from 2025 (long-term one-sided decline → oversold rebound by year-end) clearly reveals the core contradiction on the demand side: for most of the year, downstream real demand fails to absorb market supply, leading to persistent inventory pressure and pessimism that continues to drive prices downward.
Looking ahead to 2026, the demand side will be the key factor determining whether the market will continue to rebound, consolidate in a bottoming-out range, or further decline. Below is a detailed analysis based on the demand side:
Core Demand Driving Force Analysis
The downstream demand for melamine primarily consists of three components: boards and decorative papers (approximately 60%), coatings and molded plastics (approximately 30%), and others (paper, textiles, flame retardants, etc.). Its market trends are closely linked to real estate, home furnishing, and exports.
Domestic Construction and Home Furnishing Demand: Stabilizing at a Low Point, Lacking Strong Stimulus
In 2026, large-scale “incremental” real estate development is expected to be difficult to replicate. The primary demand drivers will come from policy-driven existing projects such as the completion of “delivery guarantees,” urban village renovations, and old residential community upgrades. This will provide a relatively stable “floor” for melamine demand, preventing unlimited declines as seen in 2025. However, this portion of demand is more likely to manifest as “steady release” rather than “explosive growth.”.
The fundamental shift in consumers’ expectations regarding the real estate market and income prospects implies that the demand for customized home furnishings and new construction decoration, which are closely tied to new housing, will struggle to rebound quickly. This dampens the potential for melamine demand and sets a price ceiling. The recovery in demand will be slow and structural.
2. Export Demand: Key “Unknown Factors” and Major Variables
Exports serve as the most crucial valve for melamine to digest domestic overcapacity and balance supply and demand. The price rebounded strongly in November 2025 after hitting a bottom, likely due to overseas stockpiling ahead of year-end holidays and an increase in export orders during that period.
If the manufacturing and construction sectors in major global economies (such as Southeast Asia, the Middle East, and South America) recover in 2026, or if China’s melamine industry maintains strong competitiveness due to cost advantages, leading to sustained growth in export orders, it will become the core engine driving prices and may propel the market toward an upward trend amid volatility.
If the global trade environment deteriorates or overseas demand weakens due to economic recession, the “engine” of exports will stall, forcing the domestic market to rely entirely on internal demand. With domestic demand only able to provide a “floor,” the market will revert to a supply surplus scenario, making prices highly vulnerable to further pressure and likely to fluctuate within a low range.
3. Demand in Other Industrial Sectors: Stabilizers and Potential Growth Areas
The demand in sectors such as papermaking, textiles, and flame-retardant materials remains relatively stable and is closely tied to the overall macroeconomic activity. These areas serve as a “stabilizer” for demand. The potential highlights lie in environmental protection and upgrading needs. For instance, growing demand for formaldehyde-free boards and high-end eco-friendly coatings may drive consumption of high-quality melamine. However, this segment accounts for a relatively small proportion and primarily represents structural opportunities, making it difficult to independently boost the overall market trend.
Scenario outlook for market trends in 2026 (based on demand side)
Based on the above analysis, the melamine market in 2026 may present the following three scenarios, whose probabilities and core triggering conditions are directly related to demand:
1. Benchmark scenario (highest probability): weak demand recovery, price range oscillation
Domestic policies support stable demand, but the overall real estate chain is weak; The export market has performed averagely and has not exceeded expectations. The market lacks a strong driving force for unilateral rise or fall. The price will fluctuate widely between the production cost line (around 5400, forming strong support) and the pressure level caused by weak demand (around 5900-6000). The rebound at the end of 2025 has become an effective “bottoming out confirmation”, but it cannot develop into a reversal. Trading opportunities are mainly based on frequency bands.
2. Optimistic scenario: Strong export pull, price fluctuation and upward trend
Overseas demand is strong, and export orders continue to grow, effectively diverting domestic supply pressure. Meanwhile, domestic demand does not further deteriorate. Driven by the export of this “engine”, the supply-demand pattern has been substantially improved. The price is expected to continue the rebound trend at the end of 2025, attempting to challenge and stabilize above 6000 points, presenting a pattern of “center of gravity shifting upward and fluctuating upward”. The height and duration of the rise will directly depend on the strength of exports.
3. Pessimistic scenario: domestic and foreign demand resonance is weak, and prices are once again bottoming out
The release of domestic stock projects fell short of expectations, while the export market significantly shrank, creating a dual pressure of internal and external demand. The rebound at the end of 2025 has been proven to be a short-lived replenishment market. Under the comprehensive contraction of demand, prices will rebound and then turn downwards again, testing and possibly falling below the low point of 2025 (5412.50), and the industry will enter a more painful stage of capacity clearance.
Overall judgment: In 2026, the demand side of the melamine market is unlikely to provide strong unilateral upward momentum, but it is expected to build a “bottom and top” range. It is difficult for the price to return to the high level at the beginning of 2025, but the possibility of a deep drop below the low point of 2025 is also reduced due to policy support.
Conclusion: The market in 2026 is likely to unfold in a game between “domestic bottoming demand” and “overseas export variables”. The most likely path to occur is the interval oscillation under the baseline scenario. Market participants should closely monitor changes in export data, which will be the key to breaking the volatile pattern and determining the direction of the market.
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