Low Demand and Low Inventory for Formic Acid Go Hand in Hand

August 18th News

According to the commodity market analysis system: Recently, the price of formic acid has been mainly profitable. As of August 18, the benchmark price for 85% industrial-grade formic acid in China was 3,360 CNY per ton, an increase of 25.84% from the beginning of the month, a 40% increase month-over-month, and a 21% increase year-over-year.

Mainstream manufacturers are adopting a limited-supply strategy, resulting in a significant reduction on the supply side.

Chinese mainstream companies are implementing a controlled sales policy, leading to a continuous tightening of the supply side in the market. The operating rates of manufacturers are low, and formic acid inventories are at historically low levels.

The formic acid market sees low demand alongside low inventory levels.

This price increase lacks solid demand support, as Chinese end-users continue to rely on rigid demand-based procurement. Market trading activity remains stable, but current inventory pressures may continue to build up. Combined with the typical seasonal slowdown in demand, there’s little momentum left for further price hikes.

Companies still have production-cutting plans in place.

Currently, a major producer in Shandong region plans to reduce production due to the preparation for an important event, leading to a tighter market supply situation in China.

Data analysts believe that the tight supply situation is unlikely to change, with production limits in Shandong continuing until the end of the event (expected early September), coupled with support from export orders, prices may remain at high levels and fluctuate. Specific developments still need to be monitored based on changes in market supply and demand.