This week, the melamine market experienced a price softening, failing to exhibit the comprehensive characteristics of a "firm operation." The overall market is under the expectation of oversupply, with prices supported by costs but hampered by weak demand. As of January 13, the benchmark price of melamine on Business Society was 5,625.00 yuan/ton, a decrease of 0.22% compared to the beginning of the month (5,637.50 yuan/ton).

Supply Side: The current situation on the supply side leans more toward "expected easing" and "actual pressure." In the absence of strong demand, even with low operating rates, actual supply pressure may arise due to poor shipment performance. This explains why the market did not experience a "firm operation" driven by supply tightness but instead saw price reductions by some enterprises.

Demand Side: Downstream industries such as wood-based panels and coatings have shown no signs of improvement, making the demand side a persistent weak link in the market. Without strong demand-driven momentum, the market struggles to achieve a genuine "firm" state.

Cost Side: As of January 13, the benchmark price of urea on Business Society was 1,745.00 yuan/ton, an increase of 1.16% compared to the beginning of the month (1,725.00 yuan/ton). The urea industry is in a capacity expansion cycle in 2026, with significant supply pressure expected, and the annual price center is projected to decline further. This weakens the most critical cost support for melamine in the future.

Overall, the current melamine market presents a scenario of "weak reality and weak expectations" coexisting:

Weak Reality: At the beginning of January, two major producers (Shanxi Fengxi, Sichuan Yulong) lowered their ex-factory prices by 50 yuan/ton, directly disproving the notion of a widespread "firm operation." Meanwhile, several mainstream enterprises maintained stable prices or adopted a wait-and-see approach.

Weak Expectations: The market's outlook for 2026 anticipates supply easing and weakening cost support, which limits the potential for price increases.

Therefore, the so-called "firmness" is more likely to manifest as the absence of panic-driven sharp declines in the short term, with prices finding support near the cost line and fluctuating within a narrow range. However, this represents a weak equilibrium lacking upward momentum.