1、 Price trend: rising and falling, narrow range sideways at low levels
This week, the spot price of melamine showed an overall pattern of stable before falling and stabilizing at a low level. As of June 23rd, the benchmark price was 6075.00 yuan/ton, a decrease of 0.82% compared to the beginning of this month (6125.00 yuan/ton).
The price line runs closely below the 10 day and 20 day moving averages; Since June 16th, spot prices have started to decline, gradually dropping from 6080 yuan/ton to 6075 yuan/ton. After June 18th, the market completely flattened and remained stable at 6075 yuan/ton for five consecutive days, with the largest weekly drop of only 0.12%. The end of the week trading fell into a narrow consolidation.
From the perspective of the moving average system, the 10 day moving average (red line) continues to be below the 20 day moving average (blue line), and both moving averages continue to tilt downward synchronously. The business social average (10 day moving average -20 day moving average) maintains a negative range for a long time, belonging to a typical negative range operation. The short-term average difference continues to narrow, and a negative signal of narrowing appears, indicating that the previous downward momentum is gradually weakening, the speed of price decline is slowing down, and the short-term downward space is limited.
2、 Cycle Position Indicator: The entire cycle is in the low price range
According to the position data of spot market, as of June 22, the spot price of melamine is marked as low in the one-year dimension, and the price range of the whole cycle is in the bottom range. The current spot price is 6075 yuan/ton, a cumulative decrease of 0.82% from 6125 yuan/ton at the beginning of June. The price has fallen to the cost support level in the near stage, and the deep pullback space below has been greatly compressed. This is the core support logic for this week’s market to stop falling sideways.
3、 Analysis of Upstream and Downstream Cost Confrontation
The raw material side of urea has experienced a reverse market trend. As of June 23, the benchmark price of urea in Shengyi Society was 1838.75 yuan/ton, an increase of 1.03% from 1820 yuan/ton at the beginning of June. The cost of raw materials has slightly increased, forming a bottom support for the price of melamine; However, the downstream demand for sheet metal and impregnated paper industries is in the traditional off-season, and there is a shortage of essential demand for terminal procurement. The pressure on manufacturers to sell goods is difficult to release, and cost support cannot be converted into a driving force for price increases. Under the game of long and short, the market can only maintain a low price stalemate.
4、 Trend signals and future predictions
1. The moving average remains negative but the difference continues to narrow (in a negative direction), and the downward momentum continues to weaken. Coupled with the support of low prices throughout the cycle, short-term spot prices are likely to continue to fluctuate narrowly around 6075 yuan/ton, and the sharp decline in the market is basically over; 2. The weak demand in the downstream off-season is the core suppression. Even if the cost of urea slightly increases, traders and factories do not have the confidence to actively raise prices, and there is a lack of sustained upward driving force in the short term;
3. It is necessary to track the changes in the moving average in the future. If the 10 day moving average breaks through the 20 day moving average and the moving average turns from negative to positive, it will release a signal for the price to stop falling and rebound; If the negative difference widens again, the low-level consolidation market will be prolonged.
5、 Summary
This week, the spot price of melamine fell slightly due to the off-season demand, relying on the slight increase in raw material urea to form cost support. Coupled with the low price throughout the cycle and the negative narrowing of the moving average signal to stop the decline, the market shifted from a unilateral decline to a low narrow range consolidation stage. The long and short forces are relatively balanced, and the short-term market is unlikely to have significant fluctuations. The overall situation is mainly characterized by a wait-and-see stalemate.
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