High Inventory and Soft Demand Weigh Upon the APAC Melamine Prices

In the last week of October, Melamine prices in the APAC region continued to face price pressure, with the domestic market showing a sustained weak trend since July. Low-priced goods have particularly impacted Xinjiang, contributing to this steady decline. However, there were slight signs of recovery, as procurements improved, driving a moderate increase in pricing intentions among suppliers in Xinjiang, which led to a small rebound in prices.

Although some enterprises raised quotations, room for negotiation persisted in actual transactions, reflecting a tentative recovery in trading. Despite minor improvements in downstream participation, overall market sentiment has not significantly shifted. Certain producers in specific regions have attempted to reduce prices to stimulate trading and encourage purchase activity among traders, but this effort has not yet substantially impacted the broader market atmosphere.

Recent data indicates that Melamine production capacity utilization in China has slightly decreased. While some facilities were taken offline for maintenance, the timing was staggered, leaving overall capacity utilization at relatively high levels. Recently some production units in Xinjiang and Henan enter maintenance, which caused the capacity utilization rate to hit its lowest point for the month. In terms of demand, performance remained subdued, heavily influenced by sluggish downstream markets like real estate. The construction industry’s stagnation and high inventories in downstream sheet metal factories have restricted their production, resulting in sporadic procurement of Melamine based on immediate needs rather than sustained purchasing cycles. Many manufacturers are continuing production to maintain operations, further prolonging the weak demand cycle.

Oversupply concerns are further exacerbated by the introduction of new production capacities. In addition, the ongoing restrictions on China’s urea exports have led to suppressed urea prices, with only limited export shipments permitted through government-to-government agreements. This high supply of feedstock urea, coupled with the region’s high domestic inventories, has placed further downward pressure on Melamine prices.

In South Korea, similar conditions prevail, with declining demand from key sectors and a buildup of inventory. A sluggish real estate market has reduced Melamine consumption for laminates, coatings, and other related products. Export activity also showed limited improvement due to slower-than-expected economic growth, resulting in weak market sentiment. For India, reduced import prices of Melamine from APAC suppliers and weakened downstream demand—especially from the construction and laminate sectors—have further impacted the market. The construction sector’s weak performance has been exacerbated by a combination of delayed government spending and a prolonged monsoon season, resulting in low demand for Melamine-dependent products like laminates and adhesives. The recent holiday season in APAC also limited business activity, affecting Melamine procurement across the region.

Across APAC, Melamine prices are likely to remain under pressure as new capacities come online and demand remains insufficient to absorb the surplus. With stable to increasing supply levels and limited end-use demand, the Melamine market is projected to continue in a cautious trend, as economic uncertainties and regional production adjustments shape market dynamics in the coming months.