This week, the domestic melamine market continued its downward trend, with the price center steadily shifting downwards. On October 21st, the benchmark price of melamine was reported at 6175.00 yuan/ton, a decrease of 2.37% from 6325.00 yuan/ton at the beginning of this month;
The synchronization of upstream raw material urea is weak. On October 21st, the benchmark price of urea was 1740.00 yuan/ton, a cumulative decrease of 2.25% during the month, and the cost support continued to loosen.
Fundamental analysis
Supply side: Adequate spot supply, high pressure on enterprise shipments
The domestic melamine industry has maintained a relatively high level of production, with early maintenance equipment gradually resuming production, and there is ample supply of spot goods in the market. Some manufacturers have accumulated inventory and have a strong willingness to sell at a discounted price. Regional factory quotes have gradually decreased, and low-priced goods have emerged in the market, further dragging down the overall price center.
Cost side: simultaneous weakening of urea and weakened cost support
The upstream urea market is running weakly in sync, with a loose supply and demand pattern for urea, weak demand in industry and agriculture, and a continuous downward shift in price focus. The production cost of melamine has also fallen. However, the decline rate of melamine products is faster, and the loosening of costs has not offset the negative demand, but instead compressed the profit margins of production enterprises.
Demand side: The off-season for downstream sheet metal industry is approaching, and procurement is being cautious
The main downstream industries of melamine are the sheet metal and decorative panel industries. The traditional “Golden September and Silver October” peak season expectations have fallen through, resulting in insufficient terminal orders and low operating loads of downstream sheet metal factories. The core factor suppressing the market trend is that downstream enterprises maintain essential procurement and take as needed, unwilling to stock up in advance, resulting in a sluggish market trading atmosphere and insufficient follow-up of buying orders.
Outlook for the coming period
In the short term, upstream urea is unlikely to have a strong upward drive, and cost support is relatively weak; The downstream sheet metal industry will gradually enter the winter off-season, and terminal demand is difficult to significantly recover. Coupled with sufficient spot supply, the melamine market may maintain a weak and volatile pattern, and there is still a possibility of a slight downward trend in price. It is necessary to continue to pay attention to downstream sheet metal production, raw material urea trends, and changes in export orders.
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