SunSirs: Plummeting Over 20% in a Single Month! Melamine Prices Crashed Below 7,500 RMB/Ton—When Will the Market Hit Rock Bottom?

Market Review

Last week, the melamine market experienced an extreme pattern characterized by a "sharp decline followed by sideways consolidation." The SunSirs benchmark price plummeted from 8,050 RMB/ton at the start of the week to 7,025 RMB/ton by the weekend—a cumulative weekly drop of 12.73%. This decline wiped out nearly two-thirds of the gains accumulated during the preceding rally, marking the most severe weekly downturn since the current upward cycle began.

The Core Drivers of the Decline

1. Regarding supply and demand dynamics: During the preceding phase of surging prices, the market held overly optimistic expectations regarding peak-season demand from downstream sectors—specifically sheet materials and coatings. However, terminal demand failed to show any signs of recovery throughout the current week; downstream enterprises limited their purchasing strictly to immediate necessities, and their willingness to accept high prices collapsed completely. Concurrently, production facilities that had previously undergone maintenance shutdowns resumed operations en masse, leading to a rapid rebound in market supply. Consequently, the supply-demand balance shifted from a tight equilibrium to a state of surplus, depriving prices of any further upward support.

2. The precipitous single-day plunge of nearly 10% at the start of the week shattered the market's bullish expectations, allowing pessimistic sentiment to spread rapidly. To mitigate risk, some traders opted to liquidate their inventories at discounted prices, thereby exacerbating the downward pressure on the market.

Market outlook

Short Term (1–2 Weeks): Downward momentum driven by inertia persists. Market sentiment remains deeply bearish, and downstream buyers are largely adopting a wait-and-see attitude. Prices are expected to fluctuate around the 7,450 RMB/ton level; should this support fail to hold, there remains a risk of a further decline toward the psychological threshold of 7,000 RMB/ton.

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