Recent Formic Acid Market Shows "Decreased Volume, Stable Prices" Trend in China

December 12 news

According to the commodity market analysis system: Recently, the price of formic acid in China has been stable. As of December 12, the benchmark price for 85% industrial-grade formic acid in China is 2,910 CNY per ton, unchanged from the same period last week (December 5), up 2.83% month-on-month, and up 4.86% year-on-year.

(1) Supply Side: A noticeable, phased contraction is evident, with capacity disruptions concentrated.

Combined with enterprise production cuts and maintenance: A manufacturer in Feicheng, Shandong, has implemented a second round of production cuts, keeping daily output at a low level; meanwhile, a manufacturing enterprise in Liaocheng continues to maintain some of its units under maintenance. The simultaneous contraction of production capacity in these two major regions is directly squeezing market supply.

(2) Inventory and Demand: A Weak Balance Pressures Price Fluctuations

Inventory at a high level cushions supply contraction: Despite the continuous reduction in supply, the industry's inventory in China remains at a relatively high level, and the role of inventory in filling the supply gap is significant.

Downstream weak demand constrains upward momentum: The traditional demand sectors for formic acid are showing weakness. The feed industry is in a seasonal adjustment period, with sluggish growth in demand from the farming sector; the leather and textile industries have an operating rate below 60%; the pharmaceutical and chemical sectors are only maintaining rigid, as-needed procurement, resulting in insufficient overall consumption and digestion capacity. Demand in emerging fields (hydrogen storage and transportation, flow batteries) has not yet reached a significant scale, making it difficult to support a rise in market prices in the short term.

(3) Cost End: Stable Raw Material Prices Provide Support

Formic acid production raw material, methanol, is operating at a high and stable level in the market. The lower port imports and the support from domestic olefin demand are keeping the raw material prices stable, with no significant downward pressure on the cost side. At the same time, the prices of auxiliary raw materials such as sulfuric acid are stable, maintaining the production costs of enterprises within a reasonable range, providing a basic support for the stability of formic acid prices.

Formic acid data analysts believe: Currently, formic acid has entered a phased equilibrium range. Traders' willingness to quote is stable, and downstream purchases are mainly for replenishing inventory as needed. Prices are stable, and it is expected that they will remain stable in the short term. However, specific developments still need to be monitored based on market changes.