1、 Influence of raw materials
The production of melamine mainly relies on raw materials such as urea and sodium hydroxide. As of February 18th, the benchmark price of urea in Shengyi Society was 1811.25 yuan/ton, an increase of 4.00% compared to the beginning of this month (1741.67 yuan/ton).
The prices of these raw materials are influenced by various factors such as international market supply and demand, transportation costs, and exchange rate fluctuations, resulting in significant uncertainty in their prices. When raw material prices rise, the production cost of melamine increases accordingly. In order to maintain profit levels, manufacturers often increase the selling price of melamine. Therefore, the significant increase in raw material prices is one of the important reasons for the stable and upward trend of the melamine market.
2、 Market performance
1. Price increase: With the rise in raw material costs, the market price of melamine also increases. There are differences in the prices of melamine in different regions, brands, and concentrations, but the overall trend is stable with an upward trend. As of February 18th, the benchmark price of melamine in Shengyi Society was 6287.50 yuan/ton, an increase of 0.92% compared to the beginning of this month (6230.00 yuan/ton).
2. Increased market demand: Despite the price increase, the market demand for melamine has not decreased, but rather increased. This may be due to an increase in demand for melamine in downstream industries, or a shift in demand caused by insufficient supply of substitutes.
3. Stable production capacity: Despite a significant increase in raw material prices, the production capacity of melamine has not been greatly affected and remains relatively stable. This is due to the continuous advancement of production technology and the improvement of production efficiency.
3、 Other factors
1. Policies and regulations: The government’s regulatory policies on food safety and environmental requirements for the chemical industry will also affect the price of melamine. With the strengthening of environmental policies, some small producers who do not meet environmental requirements have been eliminated, and market concentration has increased, which is conducive to large producers raising prices.
2. International trade environment: The recovery of the global economy and the improvement of the international trade environment are expected to further expand the import and export market for melamine. Domestic enterprises can increase sales and improve profitability through exports.
3. Downstream demand growth: Downstream consumption of melamine mainly consists of boards, impregnated paper, adhesives, and coatings, accounting for over 80% of the total. With the acceleration of urbanization and the continuous promotion of infrastructure construction, as well as the gradual recovery of the real estate and construction industries, the demand for melamine is expected to show an increasing trend.
4、 Future prospects
Although the melamine market is currently stable and rising, there is still uncertainty in the future. On the one hand, fluctuations in raw material prices may have an impact on the melamine market; On the other hand, changes in the domestic and international economic situation may also lead to changes in market demand and production capacity. Therefore, enterprises need to closely monitor market dynamics and policy changes, adjust procurement and sales strategies in a timely manner to cope with potential risks and opportunities.
In summary, the significant increase in raw material prices is one of the important factors driving the stable upward trend of the melamine market. Meanwhile, factors such as policies and regulations, international trade environment, and downstream demand growth have also had a positive impact on the melamine market.
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