[Weekly Melamine Review]: Upstream-Downstream Dynamics Lead To Flexible Adjustments in Company Quotations (August 7, 2026–August 13, 2026)

This week, the domestic melamine market saw a slight decline, with trading activity slowing. As of Thursday, ex-factory prices for the atmospheric process ranged from 5,650 to 5,800 yuan per metric ton. With a concentrated resumption of production at facilities that had previously undergone maintenance, the industry’s capacity utilization rate rebounded to a mid-to-high level for the year, and market supply is becoming more ample; however, most companies still have outstanding orders awaiting shipment, so inventory pressure has not yet materialized. On the demand side, after two rounds of concentrated restocking, mid- and downstream users have replenished their raw material inventories, and a cautious wait-and-see attitude has intensified among buyers. The market as a whole is in a state of negotiation between upstream and downstream players. Some companies hold a bearish outlook on the future market and are proactively offering discounts to stimulate sales, further dampening market activity. Most companies are struggling to secure new orders, and even those with relatively few pending orders are quietly offering discounts to move inventory. Looking ahead to next week, based on the current status of new order follow-ups, the market is unlikely to see significant improvement in the short term, with most companies continuing to focus primarily on fulfilling existing pending orders. As these pending orders are gradually delivered, pressure on companies to secure new orders will emerge, and market prices may gradually soften.

3. Analysis of Market Influencing Factors

1) During the week, production resumed at Shandong Helitai’s Phase 1 facility, Shandong Shuntian’s New Line 4, and Henan Junhua’s Line 4. Next week, production is expected to resume at Shandong Shuntian’s Line 1, Xinjiang Yankuang, and Sichuan Meifeng, while Zhongyuan Dahua’s facility will be shut down. Industry capacity utilization is projected to fluctuate within a narrow range next week, with an average of around 59%.

2) Wait-and-see sentiment has increased, and purchasing activity has slowed significantly.

4. Market Forecast for Next Week

On the supply side, the industry’s capacity utilization rate is expected to rebound next week. As companies gradually fulfill their existing orders and new order volume remains sluggish, inventories are likely to build up, leading to a loosening of the spot market supply. On the demand side, there is strong reluctance to purchase among mid- and downstream players. Influenced by the mindset of “buying on the rise but not on the decline,” market willingness to purchase is weak, and in the short term, companies will primarily rely on depleting their existing inventories. Regarding raw materials, no significant improvement is expected in the supply-demand fundamentals for urea; prices are expected to continue fluctuating at low levels, and persistently falling raw material prices will further dampen downstream purchasing confidence. Overall, the current market trading atmosphere is weak. Companies are struggling to secure new orders, and pressure to offload inventory is gradually emerging. The market is expected to remain under pressure, with a risk that the price center will shift downward.

5. Impact and Forecast of Downstream Flame Retardants

In the short term, the melamine market is expected to remain under pressure, with a risk that the price center will shift downward. On the supply side, capacity utilization remains high (with an average of approximately 59% expected next week); once most companies have gradually fulfilled their pending orders, pressure to secure new orders will emerge. If melamine prices continue to decline, flame retardant manufacturers will see a more favorable window for raw material procurement; however, it should be noted that if end-user demand weakens simultaneously, this could offset the positive effects of lower costs.

In the medium to long term, the fundamentals supporting demand growth for melamine-based flame retardants remain unchanged. The global nitrogen-based flame retardant market is projected to continue expanding at a compound annual growth rate (CAGR) of 6.1%, with the trend toward halogen-free formulations remaining the core driver. Therefore, the current decline in melamine prices is primarily due to a temporary supply-demand mismatch rather than a trend reversal. Flame retardant manufacturers can take this opportunity to optimize their raw material inventory structure, but should not rely excessively on this low-price window—once plant maintenance is completed and demand recovers, melamine prices may still rebound.

Overall, the current downturn in the melamine market provides a short-term cost advantage for downstream flame retardant manufacturers, but concurrent weakness on the demand side may partially offset this benefit. Companies are advised to take advantage of the current raw material price window to optimize their procurement strategies, while closely monitoring the pace of demand recovery in end-user industries such as building materials and cables.