The decline is slowing down! Melamine is entering a volatile bottoming-out cycle

1、 Price Review: High level retracement, narrow range oscillation

This week, the price of high-quality industrial grade melamine in East China fluctuated narrowly, with a price range of 6850-6887.5 yuan/ton. As of May 14th, the benchmark price of Shengyi Society was reported at 6887.5 yuan/ton, a slight increase of 0.18% from the beginning of the month (6875 yuan/ton), showing an overall pattern of “high-level stabilization and narrow range oscillation”.
From a long-term perspective, since mid February, the price of melamine has experienced a complete market trend of “unilateral upward trend – rising and falling”: from mid February to early April, the price continued to rise from about 5700 yuan/ton, reaching a peak of 9675 yuan/ton this year; After early April, the price quickly fell back, and as of this week, it has fallen to the mid to low range of the year. The current price is about 28.8% lower than the high point of the year, and still has a 28.1% increase from the low point of the year (5375 yuan/ton), at the “mid to low” level.
Market Logic: Weak Balance in the Game of Supply and Demand
1. Supply side: In the early stage of price surge, the industry’s operating rate has increased, some devices are running at full capacity, the market supply has increased, and coupled with the gradual delivery of high priced orders in the early stage, the market circulation of goods has increased, which has suppressed prices;
2. Cost side: The prices of upstream urea and liquid ammonia have been weak recently, and support has weakened to some extent. Some companies have slightly lowered their quotations with costs, but due to sufficient orders in the early stage, their willingness to raise prices still exists, which limits the space for a significant price drop. As of May 14th, the benchmark price of urea in Shengyi Society was 1837.50 yuan/ton, a decrease of 2% compared to the beginning of this month (1875.00 yuan/ton).
3. Demand side: Downstream industries such as sheet metal, coatings, and molding plastics maintain a rigid demand level, with no significant increase in terminal orders. Procurement is mainly based on on-demand procurement, lacking large-scale stocking power; Some downstream enterprises are still digesting the high priced raw material inventory in the early stage, and their acceptance of the current price is average. The market trading atmosphere is relatively weak, making it difficult to form a sustained upward momentum.
4、 Future outlook:
Overall, the current melamine market is in a stage of “slowing down the decline and narrow range oscillation”, with short-term prices possibly bottoming out in the range of 6800-7000 yuan/ton. The price has fallen to the mid to low level of the year, and the willingness of enterprises to raise prices near the cost line has increased; The 10 day moving average has stabilized, but there is insufficient short-term downward momentum;