Core viewpoint: This week (as of March 11th), the domestic melamine market has continued its strong upward trend. Under the combined effect of strong raw material costs, sudden tightening of supply, and concentrated price hikes by enterprises, the ex factory prices of major enterprises have risen by as much as 400 yuan/ton in a single day, and the market has a strong bullish sentiment.
1、 Price trend:
According to data from Shengyi Society, the benchmark price of melamine was reported at 6337.50 yuan/ton on March 11th, a cumulative increase of 6.16% compared to early March (5970.00 yuan/ton). From the performance of the week, the cumulative increase in the past week has reached 3.05%, indicating a clear upward trend in price acceleration.
2、 Upward driving force:
1. Cost side:
The core driving force behind the current rise in melamine prices comes from the significant increase in upstream raw material costs. The recent geopolitical events in the Strait of Hormuz have hindered the import of methanol, which is the core raw material for melamine. The daily increase in domestic methanol prices has exceeded 7%, directly pushing up the production cost of urea. Urea, as a direct raw material for melamine, exerts clear upward pressure on prices along the “methanol urea melamine” industry chain, providing the lowest level of cost support for the rise in melamine prices.
2. Supply side:
At the same time as the cost increases, there is also a tense situation on the supply side. After the Spring Festival, some equipment maintenance has not been fully restored, and the market spot circulation itself is not high. Against the backdrop of tight supply, the market’s “buying up” sentiment has been ignited, further fueling price increases.
3. Centralized pricing by enterprises
March 9-10 has become a critical window period for this round of price increases, with major manufacturers significantly increasing their factory prices
This large-scale and significant price increase behavior, combined with the actual shutdown of individual devices, has led to tight short-term supply expectations in the market, with production companies selling without pressure and a rise in reluctance to sell, resulting in most companies suspending orders.
4. Demand side:
The downstream sheet metal and molding plastic industries have resumed work comprehensively after the holiday, forming rigid demand support. According to the analysis of China Board Network, the prices of chemical raw materials such as melamine have skyrocketed, coupled with the large number of construction sites starting construction nationwide and the high demand for building templates, the terminal sales prices have been continuously pushed up. Although demand is not the main engine of this price increase, it provides a “pass” for price increases, allowing cost pressures to be smoothly transmitted downstream.
3、 Summary
At present, the positive news of tightening supply has dominated market sentiment. After the “buy up” sentiment was ignited, the market was booming. Most companies have suspended acquiring orders, waiting for prices to continue rising. The rising cost of raw materials and the strong willingness of production enterprises to raise prices are expected to continue supporting the short-term market.
Short term prediction: It is expected that the melamine market will maintain a strong trend in the remaining time of this week, and there is still a possibility of further exploration. However, it should be noted that after the price increase, the actual downstream demand capacity still needs to be observed, and there may be room for negotiation for some high priced transactions. Investors need to closely monitor the restart progress of parking devices, the trend of raw material prices, and the actual situation of downstream follow-up.
| Melamine |