The weak balance under cost support makes it difficult to say that the melamine market is strong

This week, the market price of melamine has loosened and has not shown a comprehensive “firm operation” characteristic. The overall market is under the expectation of oversupply, with prices supported by costs but weak demand. As of January 13th, the benchmark price of melamine in Shengyi Society was 5625.00 yuan/ton, a decrease of 0.22% compared to the beginning of this month (5637.50 yuan/ton).

Supply side:
The current situation on the supply side is more inclined towards “expected easing” and “actual pressure”. In the absence of strong demand, even if the operating rate is not high, it may still create de facto supply pressure due to poor shipments. This explains why the market has not experienced a “firm operation” driven by tight supply, but instead some companies have lowered prices.
Demand side:
The downstream industries such as sheet metal and coatings have not shown signs of improvement, and the demand side has always been a weak link in the market. In the absence of strong demand, the market is difficult to achieve true ‘resilience’.
Cost side:
As of January 13th, the benchmark price of urea in Shengyi Society was 1745.00 yuan/ton, an increase of 1.16% compared to the beginning of this month (1725.00 yuan/ton). In 2026, the urea industry is in a period of capacity expansion, with significant supply pressure. It is expected that the price center of gravity will further shift downwards throughout the year. This weakens the most important cost support for melamine in the future.
Overall, the current melamine market presents a situation of “weak reality and weak expectations” coexisting:
Weak reality: In early January, two major manufacturers lowered their ex factory quotations by 50 yuan/ton, directly falsifying the “firm operation” of general inflation. At the same time, many mainstream enterprises maintain a stable or wait-and-see attitude.
Weak Expectations: The market’s forecast for the entire year of 2026 is that supply will be loose and cost support will weaken, which will restrain the upward space of prices.
Therefore, the so-called ‘strength’ is more likely to be reflected in the absence of a panic like sharp drop in prices in the short term, gaining support and oscillating near the cost line, but this is a weak balance lacking upward momentum.