High Inventory Triggers Formaldehyde Price Drop

December 19th, according to reports

According to the commodity market analysis system: The price of formic acid has recently decreased. As of December 19, the benchmark price for industrial-grade 85% formic acid is 2,830 CNY per ton, a decrease of 2.75% compared to the same period last week (December 12), a month-on-month decrease of 2.75%, and a year-on-year decrease of 4.07%.

Supply Side: Phased Contraction but Limited Support

In the past week, the supply side has continued to show a phased contraction. A manufacturer in Feicheng operating at low capacity and a company in Liaocheng undergoing plant maintenance throughout the week directly led to a reduction in market supply. In the short term, this has somewhat alleviated the pressure of inventory digestion, but it has not changed the overall pattern of relatively high inventory levels, failing to provide sustained support for prices.

Demand Side: Weakness and Wait-and-See Attitude Dominate Market Sentiment

Weak downstream demand is the core factor weighing on the market this week. Recently, downstream industries such as feed, leather, and pharmaceuticals have shown lackluster demand. The feed industry is in a seasonal adjustment period, with weak growth in demand from the livestock breeding sector. In the leather and textile industries, operating rates remain low, while in the pharmaceutical and chemical sectors, procurement is limited to rigid, just-in-time needs only. Under the expectation of falling prices, downstream manufacturers and distributors are generally adopting a wait-and-see attitude, showing insufficient purchasing enthusiasm. This has created a vicious cycle of "weak demand—falling prices—intensified wait-and-see behavior," further exacerbating the market's stalemate.

Inventory End: High Levels Trigger Price Cuts

The industry’s inventory levels, which are slightly above the median, were a key driver of this week’s price fluctuations. Although supply continues to contract, inventory has played a significant role in offsetting the supply gap, gradually disrupting the fragile balance between supply and demand under inventory pressure. On the 17th, manufacturers proactively lowered prices to clear inventory.

Formic acid data analysts believe that the Chinese formic acid market prices will still face certain downward pressure. The current market supply and demand deadlock remains unchanged, with inventory digestion pressure still present. Downstream demand is unlikely to see substantial improvement in the short term, and prices are expected to mainly fluctuate weakly in the near future. Specific developments still need to be monitored for changes in market supply and demand.