This week, the domestic melamine market has shown strong performance, with the price center steadily shifting upwards. As of August 3rd, the benchmark price of melamine was reported at 6212.50 yuan/ton, an increase of 0.40% from the beginning of this month. Against the backdrop of stable raw material urea prices, melamine has emerged from an independent upward trend based on its own supply and demand pattern, and technical indicators show that the upward momentum is strengthening.
| Melamine |
1、 Spot market: Ladder like upward trend, stable short-term high
From the recent price trend, the melamine market has shown a clear “two in, one out” or “tiered” upward trend:
Price performance: At the beginning of the week (July 27th), the price was 6125.00 yuan/ton, followed by a slight fluctuation and consolidation. On July 31st, it broke through the 6187.50 yuan/ton mark and further climbed to a high point of 6212.50 yuan/ton in early August. Although the daily fluctuation on August 2nd was 0.00%, the overall upward trend of the center of gravity has not changed.
Raw material comparison: The upstream urea benchmark price is 1757.50 yuan/ton, which is the same as the beginning of this month. The rise in melamine prices is not driven by costs, but rather by the industry’s own tightening of supply or improvement in demand, which has restored product profit margins.
The current price has fully occupied the “high” range of the past 10, 20, 30, and 60 days. It is worth noting that although the price is at a high level in the short to medium term, it is still at a “medium low” and “low” level in the long-term dimensions of the 90 day and one-year cycles. This means that in the long run, the current price is still in the rebound stage after bottom repair, and there is still long-term space above.
2、 Technical analysis: Long position of moving averages, accelerating upward momentum
Based on the analysis of the moving average index and moving average system, the current market is releasing positive bullish signals:
Moving average pattern: Both the 10 day moving average and the 20 day moving average show a smooth upward trend. In particular, the slope of the 10 day moving average is steeper, consistently above the 20 day moving average, forming a standard ‘bullish alignment’.
Moving average signal: Currently, the 10 day moving average is above the 20 day moving average, and the opening distance between the two lines is gradually increasing. According to the core principle, this indicates that the upward trend is accelerating, the buying force is stronger than the selling force, market sentiment is high, and there is a greater possibility of price inertia rising in the short term.
Although the trend is positive, the price has already reached a “high” level in the short term (10-60 days), which usually means that short-term profit opportunities are relatively abundant. If the subsequent trading volume cannot continue to increase, we need to be alert to the demand for high-level oscillation digestion.
3、 Supply and demand game and future prospects
The core logic of the current melamine market is “tight supply supporting price increases”:
Supply side: Maintenance or load reduction of some devices have led to a decrease in market supply, and manufacturers have a strong willingness to raise prices, resulting in less inventory pressure. This is the main driving force behind price increases.
On the demand side: The downstream sheet metal and compound fertilizer industries have a decent acceptance of high priced raw materials, and the demand for essential purchases remains stable. Coupled with the contraction of the supply side, they have jointly pushed up market prices.
Future outlook:
In the short term, the melamine market is expected to continue its strong and volatile trend. The signal of “positive expansion” on a technical level supports prices to continue exploring upward pressure levels. However, as prices enter the short-term “high” zone and move away from the long-term moving average, the market may face technical corrections or sideways consolidation at any time to repair indicators. It is recommended to closely monitor changes in the manufacturer’s operating rate and downstream procurement pace. If there is a signal of excessive volume stagnation, attention should be paid to the risk of a pullback.
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