Melamine Market Steady Amid Supply Surge and Demand Weakness

Key Takeaways

• Stable Domestic Melamine Prices: Melamine prices at Mundra port remain steady at ₹79 per kg, with no major fluctuations observed recently.
• Asian Market Shows Slight Decline: The benchmark price of melamine in Asia fell to 6,287.50 RMB/ton, reflecting a minor dip of -0.55%.
• Increased Production Capacity: New facilities like Xinjiang Yankuang and Shaanxi Longhua have bolstered domestic supply, leading to oversupply challenges.
• Weak Demand From Key Industries: Subdued activity in sheet metal, coatings, and impregnated paper industries limits demand due to real estate sector slowdown.
• Optimism for Future Demand: Relaxed real estate policies and market adjustments could revive melamine demand in the near term.

Melamine Prices: Stable Domestic Market and Declining Asian Market

• The price of imported melamine at Mundra port is currently ₹79 per kg (Bulk Packaging), with no significant change in price levels observed.
• In the Asian market, the benchmark price of melamine stands at 6,287.50 RMB/ton, reflecting a slight decrease of 0.55% compared to the beginning of January (6,322.50 RMB/ton).

Demand-Supply Dynamics: Higher Production Amid Demand Slowdown

• Melamine production capacity has significantly increased over recent years, with notable additions in the latter half of 2024 from facilities such as Xinjiang Yankuang, Henan Jinkong Tianqing, and Shaanxi Longhua.
• This has resulted in a substantial rise in domestic supply. However, weak profitability across the industry has prompted some manufacturers to scale back or delay production, providing temporary relief to the oversupplied market.
• The primary consumers of melamine include industries such as sheet metal, impregnated paper, and coatings. However, demand remains subdued due to the ongoing slowdown in the real estate sector, which directly impacts associated downstream industries.
• Despite current challenges, the relaxation of real estate policies and gradual market adjustments are anticipated to revive downstream activity, potentially boosting melamine demand in the near term.

Chemicals News: Asia–Potash Investment in Egypt and Aether Industries Plant Restart

• China’s Asia–Potash to build a $1.6B phosphate fertilizers complex in Egypt - In first phase, the company aims to explore and extract 2 MMt/y of phosphate and convert it into phosphate fertilizers.
• BASF increases prices for TDI in ASEAN and South Asia - The company increases prices by $300 per metric ton.
• India’s Aether Industries restarts plant - Gujarat Pollution Control Board revokes closure order issued on Nov. 29 following fire incident
• Naphtachimie experiences production issues at its Cracker on 8th January, 2025. The Cracker is located in Lavera, France with a Propylene production capacity of 515,000 Tons/Year, and an Ethylene capacity of 740,000 Tons/Year.
• Chevron Phillips Chemical (CP Chem) experiences technical issues at its EU-1592 Ethylene Unit due to an unplanned outage of a cracked gas compressor (CGC). The Unit is located in Cedar Bayou, Texas, USA with a Propylene production capacity of 45,000 Tons/Year and an Ethylene capacity of 1.725 Million Tons/Year.
• RASCO/NOC is in the process of increasing operating rates at its Cracker after being restarted recently. The Cracker is located in Ras Lanuf, Libya with a Propylene production capacity of 185,000 Tons/Year and an Ethylene capacity of 360,000 Tons/Year.

Expert Opinion: Expectation of Future Demand

Melamine prices are expected to stabilize with a possibility of slight upward movement as supply-demand adjustments take effect. The melamine market is likely to see intensified competition with the continued release of new production capacity and weak downstream demand.