Business Society: Formic Acid Price Center Moves Lower, Entering a Consolidation Phase

October 09, News

According to the commodity market analysis system: Recently, the formic acid market has been exhibiting a weak consolidation pattern amid a fragile balance between supply and demand. As of October 9, the benchmark price for formic acid stood at 2,933 CNY per ton, down 3.3% from before the holiday, a week-on-week decline of 8.9%, yet still up 5.71% year-on-year.

Inventory Release

On September 25, manufacturers released reserved inventory and initiated a price adjustment mechanism, effectively reducing corporate inventory from high levels to a medium level of 55%-60%. Leading companies such as Luxi Chemical maintained a low inventory strategy, while small and medium-sized enterprises faced greater inventory pressure due to their high proportion of externally purchased raw materials.

The demand side shows weak demand.

Before the holiday, the market was in a price-adjustment phase, with some downstream companies adopting a moderate purchasing strategy due to pre-holiday inventory needs and expectations that prices had bottomed out. However, overall, demand from end-market customers remained weak.

Raw methanol prices are supported.

After the National Day holiday, the methanol market will simultaneously enter a critical phase characterized by upstream companies clearing their inventories and downstream businesses replenishing stock levels. Influenced by persistently high coal prices and rising natural gas costs, methanol prices have limited room to decline, providing some support for formic acid costs.

A formic acid data analyst believes: Currently, formic acid prices lack significant upward momentum amid cost support and a weak supply-demand balance, and are expected to continue trading in a range-bound, weak pattern.