Recently, the melamine market has indeed shown a weak trend, which is mainly caused by multiple factors such as fluctuations in raw materials, increased supply, and average demand. As of November 12th, the benchmark price of melamine in Shengyi Society was 6625.00 yuan/ton, a decrease of -0.93% compared to the beginning of this month (6687.50 yuan/ton).
| Melamine |
The following is a detailed analysis of the current weak operation of the melamine market:
1、 Raw material oscillation
One of the main raw materials for producing melamine is urea, and its price fluctuations directly affect the production cost and market price of melamine. In the first half of 2024, domestic coal supply is abundant, downstream daily consumption recovery is slow, and coal inventory is high, leading to a continuous downward shift in coal prices and a reduction in urea production costs. This cost reduction provides some room for a decrease in urea prices, which in turn affects the raw material cost of melamine. However, the reduction in raw material costs did not effectively boost the market demand for melamine, but instead exacerbated the weak operating situation of the market due to oversupply. As of November 12th, the benchmark price of urea in Shengyi Society was 2188.75 yuan/ton, a decrease of -0.28% compared to the beginning of this month (2195.00 yuan/ton).
2、 Supply increase
New production capacity deployment: Recently, multiple melamine plants have been put into operation or planned to be put into operation, which directly leads to a significant increase in market supply.
Restoration of Maintenance Equipment: Some melamine units that were previously shut down due to maintenance have resumed production, further increasing market supply. These devices for resuming production have made the already oversupplied market even more severe.
3、 General demand
Insufficient production in downstream industries: Downstream industries related to melamine, such as sheet metal and impregnation, have seen a decrease in production load, resulting in an overall shortage of demand for melamine. The market demand of these downstream industries is an important support for the melamine market, but their insufficient production directly weakens the market demand.
Reduced procurement demand: Due to increased supply and insufficient demand, downstream manufacturers and traders have reduced their procurement demand for melamine. This further exacerbates the weak operating situation of the market, leading to a downward trend in the price of melamine in the market.
4、 Market Impact and Future Prospects
Market price decline: Affected by the increase in supply and weak demand, the market price of melamine is showing a downward trend. Although prices have fluctuated during certain periods, overall the market price center is gradually shifting downwards.
Prominent supply-demand contradiction: With the gradual release of new production capacity and the sustained weakness of downstream industry demand, the supply-demand contradiction in the melamine market will become even more prominent. This may lead to continued pressure on market prices and face greater downward pressure.
Future trend judgment: It is expected that the market price of melamine will remain low for a period of time in the future. However, the specific price trend still needs to be judged based on market dynamics and changes in supply and demand relationships. Enterprises need to closely monitor market dynamics and changes in supply and demand relationships to flexibly respond to market challenges and seek development opportunities.
In summary, multiple factors such as fluctuations in raw materials, increased supply, and average demand have collectively led to the current weak operating situation of the melamine market. The future market trend will be influenced by various factors, including the deployment of new production capacity, the recovery of downstream industry demand, and changes in raw material costs.
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