This week, the melamine market has indeed shown a pattern of “stability oriented, narrow upward trend”. As of February 11th, the benchmark price of melamine in Shengyi Society was 5737.50 yuan/ton, an increase of 1.10% compared to the beginning of this month (5675.00 yuan/ton).
1、 Market dynamics
The recent stability of the market is mainly due to the balance of three factors: cost, supply, and demand
1. Cost side: The price of raw material urea increased in January, providing rigid cost support for melamine and limiting the downward space of prices.
2. Supply side: Although the devices that were previously repaired have gradually resumed production and the industry’s operating rate has rebounded, there has not yet been a serious oversupply pressure, and the market supply and demand are in a weak balance state.
3. Demand side: Downstream industries such as sheet metal and coatings have a slow pace of resuming work, and often adopt a strategy of on-demand procurement. The large-scale pre holiday stocking wave has not appeared significantly. At the same time, the export market performed steadily, but failed to provide an unexpected boost.
2、 Short term outlook for the future market
Overall, during the period before the Spring Festival, the melamine market is expected to continue to maintain a fluctuating trend. The solid cost bottom line and the strong willingness of production enterprises to stabilize prices determine that prices are difficult to fall deeply in the short term. The weak domestic demand and the lack of strong export drivers have also suppressed the potential for significant price increases.
The choice of the next direction for the market will mainly depend on factors such as the intensity of downstream resumption of work and replenishment after the holiday, as well as whether export orders can significantly improve.
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