1、 Market Overview:

This week, the melamine market showed a stable and positive trend. As of February 26th, the benchmark price of Shengyi Society has risen to 5750.00 yuan/ton, an increase of 1.32% from the beginning of this month, successfully breaking through the integer threshold of 5750 yuan. The synchronous recovery of the spot market reflects the improvement of regional transactions. This round of increase is mainly driven by downstream replenishment demand after the holiday, but the deep game in the market is still fierce.
2、 Cost side:
The price of raw material urea has strengthened from weak to strong, significantly increasing the cost support for melamine. With the start of spring plowing and fertilizer preparation, the release of policies to ensure supply and stabilize prices, and the boost in export expectations, urea prices have clearly increased. As of February 26th, the benchmark price has risen to 1830.00 yuan/ton, an increase of 2.66% from the beginning of the month. This means that the current price increase of melamine has the dual support of “cost driven” and “demand driven”, which is different from the previous pattern driven solely by demand. However, the inventory of urea companies is still at a high level of 1.176 million tons, and the pressure of accumulated inventory limits their price surge space. Therefore, the cost support for melamine still needs to be dynamically observed.
3、 Supply side:
The supply side exhibits a dual characteristic of “short-term order and long-term pressure”.
Short term: In early February, the industry’s capacity utilization rate was about 57.95%, and some companies had tight supply of goods, so there was no significant pressure to acquire orders at the moment.
Long term: The key variable is that the 120000 ton annual production facility of Xinjiang New Hebei Energy has been successfully put into operation on February 12th, and the new production capacity has officially entered the market. This will gradually increase market supply and intensify industry competition.
Fundamental: The long-term overcapacity pattern in the industry has not changed, and any short-term demand driven increase may be suppressed by sufficient supply capacity.
4、 Demand side:
Downstream demand shows a seasonal rebound. After the end of the Spring Festival holiday, there is a demand for replenishment in industries such as sheet metal, which provides short-term driving force for the market. But the demand is moderate, downstream purchases are mostly on demand, and there has not been large-scale centralized procurement yet. The export market is also stable. This round of demand is supported by a “short-term window period” rather than a strong trend recovery.
5、 Future prospects
Overall, the current market belongs to a short-term demand driven upward trend, and in the context of long-term overcapacity, the upward space will be suppressed. It is expected that the market will remain stable with strong fluctuations in the short term. If demand support weakens in the future and supply increases, the market may face downward pressure.