Starting July 1, the export tax rebate for domestic melamine was cut from 13% to 5%, marking a significant shift in trade policy. At the same time, export quotations for melamine in China rose sharply in July, with most offshore prices ranging between $1,030 and $1,090 per ton. This represents an increase of $100 to $140 compared to June, before the tax adjustment. As a result, the additional costs caused by the lower tax rebate are being fully passed on to importers—an unusual situation in the current market. Typically, such added costs are either shared between exporters and importers or absorbed entirely by the seller. However, in this case, it seems that the burden is falling squarely on the buyers.
So why is the melamine export sector performing so strongly? There are two main factors driving this trend.
First, there’s strong international demand. The downstream industries have been in better shape, leading to active trading in the near term and a tight supply situation. This has pushed up market prices. For example, the contract price of melamine in Europe is now between €1,115 and €1,205, up 30 euros since early July. In the U.S., prices range from $1,546 to $1,657, reflecting an increase of $69 to $92 over June. Meanwhile, the CIF price in Southeast Asia has also risen by $20, reaching $1,090 to $1,130. Overall, the industry outlook remains positive.
Second, China holds a dominant position in the global melamine market. Although its production started later than some other countries, it has grown rapidly. Output increased from 130,000 tons in 2001 to over 400,000 tons by 2006, with an average annual growth rate of 20%. Meanwhile, demand has also grown steadily, at 10% to 20% per year. It’s expected that this year’s demand will reach around 300,000 tons.
China exports between 20% and 40% of its annual melamine output, mainly to Europe, the Americas, Asia, and Australia. Since the start of the year, monthly exports have exceeded 10,000 tons, with cumulative exports through May rising 114% year-on-year to 62,000 tons—the highest in history. As China becomes a major supplier in the global market, its influence continues to grow.
Currently, China's melamine industry is strong in terms of production capacity, market demand, and export volume. On the production side, rising costs of natural gas, energy, and raw materials have forced some European, American, and Asian producers to cut back or shut down operations. In contrast, Chinese producers benefit from lower urea costs, allowing them to expand capacity and boost output quickly.
In terms of demand, China remains one of the fastest-growing regions globally. And in exports, China's share of the world market is around 10%, giving it a decisive role in shaping global prices and supply dynamics. Looking ahead, China's strong position in the international melamine market is expected to become even more pronounced.
Suzhou Industrial Park Hojama Technology Co., Ltd , https://www.hojamax.com