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As global resource prices continue to rise, the production of melamine—especially those relying on urea as a raw material—is becoming increasingly concentrated. With the expanding applications of eco-friendly downstream products like melamine-modified urea-formaldehyde resins, international demand has steadily grown and is now extending further into new markets. Industry experts at the recent "Second China Melamine and Downstream Industrial Development Promotion Summit" noted that the characteristics of global melamine production bases, their scale, and industrialization are becoming more pronounced, highlighting the industry's move toward greater concentration and efficiency. The trend is accelerating, with the melamine sector showing clear signs of intensification.
The concentration of production facilities has been driven by rising costs of basic materials such as crude oil and natural gas. Several U.S., Japanese, and South Korean manufacturers have either shut down or significantly reduced output. Companies like Japan’s Mitsui and U.S.-based Cyanamide have cut production by over 50%, with Mitsui exiting the melamine market entirely in February of last year.
While some producers are scaling back, major global players are seeking new strategic locations. Dutch company DSM, the world’s largest melamine producer, announced plans to restructure its European operations and expand influence elsewhere through joint ventures or sales. In 2008, DSM finalized a collaboration with Shanxi Fengxi Fertilizer in China, leading to the official launch of a joint venture in February of this year. Meanwhile, Lurgi’s 40,000-ton/year project in Russia is set to begin operations in June, and AMI’s 80,000-ton plant in the Middle East is under construction, expected to start production in 2009.
Wu Haibo, deputy general manager of Sichuan Meiqing Cyanamide Co., Ltd., highlighted that future global melamine production centers will likely be in China, the Middle East, and the Black Sea region.
Downstream development is also becoming an essential strategy for melamine manufacturers. Li Jian from the Beijing Triazine Xingda Chemical Research Institute discussed how the U.S. and Western European markets have long maintained high consumption levels, supported by traditional products and advanced surface technologies. The U.S. industry, known for its large-scale and efficient production model, ensures product quality and the ability to adopt new technologies. Companies like Cytec have expanded their melamine-based product lines, offering over 50 varieties of coatings, adhesives, and resins under the Cymel brand.
In Western Europe, companies like BASF and Linz not only produce melamine but also convert it into downstream products. BASF converts 70,000 tons annually, while Linz achieves a 50% internal conversion rate. These producers provide critical technical support for innovation and expansion in new application areas. For example, BAURA’s KAURAMIN and KAURIT brands offer a wide range of wood adhesives and resins, ensuring strong market presence.
With energy prices continuing to climb in 2008, some plants may face shutdowns due to high operating costs. However, strong demand in Europe, North America, and Southeast Asia suggests a growing supply-demand gap. Yan Haibo noted that this situation presents a positive outlook for the melamine industry, with continued demand expected before new large-scale projects come online.
Melamine’s versatility has also driven its market growth. It is widely used in the production of melamine-formaldehyde resins, valued for their non-toxicity, heat resistance, durability, and electrical insulation properties. Applications span wood processing, plastics, paper, textiles, and leather. Additionally, melamine serves as a flame retardant, water reducer, and formaldehyde scavenger, making it an environmentally friendly chemical.
According to Zhou Chunguo, technical service manager at DSM (China), the expansion into new applications will further boost melamine’s market potential. In the long term, the industry is expected to maintain its growth trajectory, with intensified competition and innovation driving faster development.