Supply-Demand Dynamics Dominate Market Trends; Formic Acid Prices Stabilize and Remain Flat

February 3rd, according to news,

According to the commodity market analysis system: After a slight recovery in formic acid prices in mid-January, the recent Chinese formic acid market has shown a stable and sideways consolidation trend. The main transaction price has remained steady at 2,350 CNY per ton, with no significant fluctuations. The core characteristic of this phase of the market is the dynamic game between supply and demand. The realization of supply-side maintenance expectations and the support of pre-holiday rigid demand on the demand side have interacted, jointly maintaining price stability. The industry as a whole presents a "reduced volume, stable price" operational pattern.

Supply is the core variable affecting the market in this cycle in China.

From January 27 to January 29, the market's core focus was on the maintenance plan for a major production facility in Liaocheng. At that time, the facility had not yet started maintenance and was only in the expected maintenance phase, but this expectation had already provided effective support to the market. During this period, the overall shipment rate of the market remained at a moderate level, and the industry inventory was also in the middle range. The reasonable inventory and shipment pace laid the foundation for stable prices.

January 30, the maintenance expectation was officially implemented, and a factory in Liaocheng, China, started a 100,000-ton formic acid plant maintenance, leading to a substantial reduction in market supply. The tightening of the supply side became a certainty. On February 2, the impact of the maintenance continued to be felt, and the overall market supply further contracted. However, due to the industry inventory being at a moderate level and the ongoing effect of the policy to reduce production and maintain prices, the gap caused by the supply reduction was partially offset by reasonable inventory, preventing market supply tension and avoiding upward price fluctuations.

Demand Side, "Rigid Demand Dominates, Limited Increment"

As the Spring Festival holiday approaches, downstream enterprises have generally adopted a more cautious purchasing attitude, abandoning their previous wait-and-see stance and shifting to a demand-driven procurement model. Most purchases are now focused on meeting immediate production needs, with no large-scale pre-holiday stockpiling taking place. As a result, market purchasing activity remains relatively stable. Looking at the overall performance of downstream industries, traditional demand sectors such as feed, leather, and dyeing—where formic acid is commonly used—are experiencing a seasonal low period, with operating rates falling below 60%. Consumption capacity is limited, while sectors like pharmaceuticals and chemical industries are sustaining only minimal rigid demand procurement, failing to generate substantial upward momentum in the market.

Formic acid data analysts believe: As the Spring Festival holiday approaches, market trading activity is likely to further decline, and downstream enterprises' procurement demand will probably continue to be mainly for immediate needs. On the supply side, the main plant maintenance in Liaocheng is still ongoing, and the market supply will remain in a contracted state. The balance between supply and demand is unlikely to be broken in the short term. It is expected that the Chinese formic acid market will continue to maintain a sideways consolidation trend in the short term, with the mainstream price remaining around 2,350 CNY/ton.