Formic Acid Prices First Rise and Then Stabilize

May 25th, according to the news,

According to the commodity market analysis system: Recently, the Chinese formic acid market has shown a "first rise then stabilize, continuous sideways" phase trend. As of May 25, the benchmark price for 85% industrial-grade formic acid is 2600 CNY/ton, unchanged from the previous period, and up 4% year-on-year.

The supply side is the key driver behind this round of price increases.

In the early stage of the market, manufacturers initiated a one-month plant maintenance, during which half of the facilities were shut down for repairs. This directly led to a reduction in market supply, disrupting the previous balance between supply and demand, and driving prices upward. After the price increase, the core reason for the sustained stability in the market was the weak support from the demand side. Currently, the overall demand from downstream sectors is lackluster, with low procurement enthusiasm and slow purchasing pace. The manufacturers' product sales have slowed, unable to provide effective momentum for further price increases. This has offset the positive support from the supply contraction, leaving the market in a stalemate where prices are neither rising nor falling.

Looking at Xianhuotong:

Currently, the 10-day moving average (red) of formic acid is above the 20-day moving average (blue) in China, and the difference between them is expanding, indicating an acceleration in the upward trend.

Moreover, the current price is at a mid-to-low level and still has room to rise.

Overall, the current Chinese formic acid market supply and demand is in a weak equilibrium. The positive impact of plant maintenance on the supply side has been fully absorbed, while the weak demand situation shows no signs of improvement. In the short term, the market focus will remain stable, with prices unlikely to see significant fluctuations. Future market trends will mainly depend on the recovery of downstream demand and supply changes due to plant maintenance, with a potential for minor fluctuations. Specific attention should still be paid to changes in market supply and demand.