1. Market review of the month

China’s melamine market continued its upward trend in August.

As of August 29, the factory price of melamine products in China rose by 13.16% this month, an increase of 3.07 percentage points compared with the previous month; A slight increase of 1.78% compared to the same period last year.

This month, the price of melamine continues to rise, on the one hand, driven by the cost side, urea prices remain high, some manufacturers continue to increase production costs, the intention to increase prices is also obvious. On the other hand, due to the increase in equipment maintenance this month, the operating rate of enterprises declined and the supply decreased, manufacturers still have a lot of orders to be loaded, the manufacturer’s willingness to increase price is also strong. The downstream demand has not changed obviousy, and the goods are mostly rigid demand, so the wait-and-see mood is stronger.
In addition, as the price continues to rise to a high level, and the subsequent trend is unclear, some middlemen are willing to increase the shipment, and the new order will be purchased according to sales volume.

2. Market analysis and forecast for next month

From the perspective of raw materials, the urea market may decline in the later stage, but the price will still be relatively high, and the cost support for melamine still exists.
From the supply level, part of the maintenance device in August will resume operation next month, but there are still some enterprises in September there are plans to stop production, the load rate will be maintained at about 60%, because the overall supply pressure is not large, manufacturers are willing to support prices.
From the demand level, next month will enter the “gold nine” traditional consumption season, the overall level of downstream factories is expected to be sufficient, the increase in demand, which forms a certain positive support for the market.
At present, the price has basically risen to the highest level so far this year, and it may be slightly cautious to continue to rush higher. However, there is a possibility of reduced supply and increased demand in the later period, and there is no inventory pressure on enterprises, so the domestic melamine market will remain at a high level in early September, but it is necessary to pay attention to downstream start-up changes in the second half of the year, if the recovery is less than the expected level, with the recovery of melamine production equipment, supply tends to be relaxed, the price may be adjusted appropriately.

Remark: The analysis is based on transaction in China’s domestic market, it’s only for reference.

Contact information: melamine@easthony.com