Cost driven melamine market continues to decline

Market situation
Recently, the melamine market has indeed faced the dilemma of negative sentiment and sluggish demand, leading to overall downward pressure on the market. However, in the long run, these negative factors will inevitably have a profound impact on the market.

Affected by both sluggish demand and oversupply, the market price of melamine is showing a downward trend. As of April 21st, the benchmark price of melamine in Shengyi Society was 6000.00 yuan/ton, a decrease of -2.24% compared to the beginning of this month (6137.50 yuan/ton).
Low demand: Downstream industries associated with melamine, such as sheet metal and impregnation, have experienced reduced operating loads, resulting in an overall shortage of demand for melamine.
The real estate industry, as one of the important application areas of melamine, continues to be sluggish, with new construction areas and development investments continuing to decline, further weakening market demand.
Low raw material prices: The domestic urea market continues to operate steadily with a weak trend, with some manufacturers experiencing a slight decrease in quotes, and the overall market transaction center shifting downwards. This has reduced the production cost of melamine, but has not effectively boosted market demand. As of April 21st, the benchmark price of urea in Shengyi Society was 1924.00 yuan/ton, a decrease of -3.66% compared to the beginning of this month (1997.00 yuan/ton).
Inventory backlog: With the increase in supply and insufficient demand, some companies’ inventory begins to accumulate. This not only increases the operating costs of the enterprise, but may also have adverse effects on subsequent production and sales.
Future prospects
Adjustment of supply and demand relationship: With the gradual release of new production capacity and the gradual recovery of downstream demand (although currently sluggish), the supply and demand relationship of the melamine market is expected to be adjusted to some extent in the future. However, in the short term, the market may still face pressure from oversupply.
Low price operation: Affected by the increase in supply and weak demand, the market price of melamine is expected to continue to operate at a low level. The specific price trend still needs to be judged based on market dynamics and changes in supply and demand relationships.
In summary, the current melamine market is indeed facing the dilemma of negative sentiment and sluggish demand. However, by strictly controlling production capacity, improving product quality, expanding application areas, and strengthening international cooperation, enterprises can actively respond to market challenges and achieve sustainable development.