Melamine Market Intelligence Report – Recent Dynamics

I. Price Trends
- Recent Price Volatility: In Week 20 of 2026 (May 18–22), melamine prices declined sharply. The opening-week quotation stood at RMB 6,937.5/ton, falling to RMB 6,150/ton by week-end—a decline of 11.35%, the largest weekly drop among all monitored commodities. As of May 27, the benchmark domestic melamine price remained stable at RMB 6,150/ton. However, several enterprises continued lowering their offers: Shandong Shuntian Chemical’s ex-factory price dropped by RMB 100/ton to RMB 6,100/ton; Hubei Dangyang Huaqiang’s ex-factory price fell by RMB 500/ton to RMB 6,200/ton.
- Historical Price Comparison: In October 2025, the mainstream domestic ex-factory cash reference price for melamine was RMB 5,084/ton—approximately 17.3% lower than the current level. Year-on-year, melamine prices plummeted by 20% across 2025, reflecting persistent long-term market pressure.

II. Supply-Demand Landscape
- Supply Side:
- Capacity Expansion: China’s domestic melamine capacity reached 2.31 million tons in 2024 and is projected to increase to 2.6 million tons by end-2025. An additional 940,000 tons of new capacity is expected to come online over the next few years. Ongoing industry expansion maintains a structurally loose supply environment.
- Plant Operations: During the reporting week, both restarts and planned shutdowns occurred across production facilities. Overall plant utilization rates remained high, and physical inventory was relatively ample. For instance, in May 2026, many plants operated normally; however, most producers held solid pre-sold order books and adopted firm pricing strategies. Some enterprises reported no pressure on sales and even expressed cautious optimism regarding potential price stabilization or modest upward adjustments.
- Demand Side:
- Traditional Demand Weakness: Melamine’s core downstream sector is the construction materials industry, accounting for nearly 60% of total consumption—and closely correlated with the real estate market. In 2024, newly built commercial housing sales area in China declined by 12.9% year-on-year; concurrently, melamine consumption in the engineered wood panel industry dropped ~6%. Consumption is projected to further fall to 710,000 tons/year in 2025.
- Emerging Demand Growth: Certain novel downstream applications—including flame retardants and melamine-based fibers—showed robust growth. Nevertheless, overall demand growth remains sluggish and insufficient to absorb the expanding supply.

III. Cost & Profitability
- Raw Material Prices: Urea—the primary raw material for melamine—averaged RMB 1,762/ton in Q3 2025, down 6.37% quarter-on-quarter and 17.27% year-on-year. Urea prices are expected to remain weak and range-bound in Q4 2025, offering minimal cost support for melamine.
- Enterprise Profitability: As of October 16, 2025, for melamine producers sourcing urea externally, theoretical production costs in Shandong ranged between RMB 4,778–4,856/ton, yielding a gross margin of RMB 228/ton—down RMB 16/ton week-on-week. Vertically integrated producers (with captive urea supply) achieved a gross margin of RMB 395/ton, down RMB 63/ton week-on-week. Shrinking profitability continues to dampen operational enthusiasm.

IV. Import-Export Situation
- Imports: In April 2026, melamine imports totaled 15.58 tons—a 97.22% month-on-month increase; the average import price rose 5.56% MoM to USD 3,220.73/ton. Although import volumes surged significantly, absolute quantities remain negligible, exerting minimal impact on the domestic market.
- Exports: From January to August 2025, China exported 427,300 tons of melamine, up 6.2% YoY. However, the average export price declined by USD 166.3/ton to USD 741.36/ton—indicating that volume growth failed to translate into improved profitability.

Analysis & Assessment
1. Deepening Supply-Demand Imbalance: Persistent capacity expansion starkly contrasts with weakening demand, rendering the oversupplied market structure difficult to reverse. Although some producers attempt to stabilize prices through selective order fulfillment and pricing discipline, underlying demand insufficiency fundamentally constrains upside potential.
2. Eroding Cost Support: Sustained low urea prices further undermine cost-based price floors for melamine. With margins continuing to compress, certain producers may opt for production cuts or scheduled maintenance to alleviate inventory pressure.
3. Pervasive Market Pessimism: Broader commodity markets remain under pressure, with the chemical sector leading declines. As a midstream chemical product, melamine faces mounting headwinds from supply abundance, demand softness, and subdued sentiment.

Forward Outlook
1. Short-Term Price Trend: Melamine prices are expected to continue declining modestly or remain range-bound at low levels. A confluence of oversupply, sluggish demand, and inadequate cost support leaves little catalyst for upward movement.
2. Medium-Term Supply-Demand Adjustment: As new capacity gradually comes online, market prices will likely oscillate around marginal production cost levels over the medium term. Producers must respond via strict capacity management, enhanced product quality, diversification into higher-value applications, and strengthened international cooperation.
3. Long-Term Industry Evolution: Industry concentration is set to rise further, with leading players consolidating advantages through digital transformation and vertical integration. Meanwhile, green and high-end transformation will become pivotal strategic imperatives—environmentally sustainable and functionally advanced melamine products are expected to gain increasing traction.