How do melamine prices respond to urea cost changes and downstream demand?

Melamine prices remain under pressure from weak downstream buying, particularly in the wood panel and adhesive sectors. Recent weekly data shows prices edging lower, with ample supply in western China and lackluster demand. Plants in Xinjiang and Hubei are expected to resume operations, adding further supply pressure. The market sentiment is cautious, and prices are likely to stay soft in the near term. On the cost side, urea prices have been firming due to rising coal costs and seasonal maintenance, which raises production costs for melamine. However, the demand weakness is currently dominating price direction. Operating rates in the melamine sector have been relatively stable, but sustainability is questionable given the poor demand environment. Environmental restrictions in northern China have also limited production at melamine and panel facilities, reducing feedstock procurement.