1. Significant Increase in Raw Material Costs:
The price of cyanuric acid, the main raw material, is drastically affected by the tight supply of upstream urea. Global urea production capacity is expected to decrease by approximately 8% in 2026 due to geopolitical conflicts, pushing cyanuric acid prices from RMB 800/ton to RMB 1100/ton (an increase of 37.5%), directly leading to an increase in the proportion of production costs from 55% to 65%.
2. Structural Contraction on the Supply Side:
Stricter national "dual carbon" and environmental policies are forcing small and medium-sized production capacities with high energy consumption and low emission standards to cease production and exit the market, resulting in some companies shutting down.
3. Continued Strong Demand:
Increased public health awareness, expansion of water treatment and aquaculture industries, and strong demand in export markets (Southeast Asia, the Middle East, South America, Africa, etc.) are supporting high-price transactions due to increased downstream demand and higher acceptance of prices.
