Formic Acid Stabilizes First in May, Then Rises, and Remains Stable After the Rise

June 1st, according to the news

According to the commodity market analysis system, the overall 85% formic acid market in China in May showed a phased trend of initial stability followed by a rise, then stabilization, and finally weakness at the end of the month. At the beginning of the month, the price was stable for a long time with 2400 CNY/ton as the benchmark. Mid-month, the market saw a phase of price increase stimulated by plant maintenance and supply contraction, with prices rising to 2600 CNY/ton. Subsequently, the price stabilized due to weak demand. By the end of the month, the supply-demand contradiction became more apparent, and the overall market trend was one of stability with a tendency towards weakness.

Early May: The market maintained a stable sideways trend, with a weak pattern gradually becoming more apparent.

In early May, the Chinese formic acid market continued the sideways trend from late April, maintaining a stable price of 2400 CNY/ton with no fluctuations. The overall market operation rhythm was steady. The supply side showed stable production, with no significant reduction in enterprise output, ensuring ample supply. In terms of inventory, due to the concentrated low-price sales by manufacturers before the holiday, some enterprises saw a slight decrease in inventory during the May Day holiday, alleviating short-term inventory pressure and supporting stable market prices. The demand side remained weak, with downstream enterprises not making any concentrated restocking moves, only maintaining daily rigid demand procurement. The overall shipping pace was slow, forming a weak balance between supply and demand.

As the market progressed in the first half of the month, both bearish factors and anticipated bullish factors gradually became apparent. On the one hand, the downstream market generally holds a pessimistic outlook, lacking substantial positive catalysts to boost prices. As a result, formic acid prices have steadily accumulated downside risks, and industry inventories have been trending upward toward the middle-to-upper range, accumulating at a slow pace. On the other hand, news about plant maintenance in the industry has been gradually emerging; several companies plan to start maintenance operations in the mid-to-late part of the month and at the end of the week. Market expectations for subsequent supply contraction and price hikes have continued to intensify, laying the groundwork for a price increase around the middle of the month. As of May 18, industry manufacturers have officially begun plant maintenance, with maintenance periods lasting up to a month. However, in the short term, this has not yet disrupted market prices, which remain stable at 2,400 CNY per ton.

Mid-May: Supply contraction led to price increases, which then quickly stabilized.

May 19th became a key turning point for the formic acid market price this month. Due to a significant reduction in supply, the Chinese formic acid market experienced a small, phased increase in prices for the year. On that day, the average market price of 85% content formic acid rose to 2,600 CNY per ton, with a single-day price increase of 8.33%, breaking the sideways trend that had persisted in the early part of the month. The core driving factor for this price increase was the implementation of previously planned maintenance, with half of the major manufacturers' facilities entering a maintenance period. This led to a decline in the effective operating load of the industry, a noticeable reduction in the supply of market goods, and a temporary improvement in the supply-demand balance, pushing prices upward.

Late May: High-level stable operation, the market is steady but showing signs of weakness

In late May, the Chinese formic acid market continued to maintain a high-level sideways trend at 2600 CNY/ton, with prices remaining stable. However, the internal supply-demand contradiction continued to intensify, and the overall market trend showed a weakening trend despite the stability.

On the supply side, although the industry's plant maintenance is continuously advancing, leading to a reduction in the theoretical supply of goods, the initial inventory base in the industry was high. As a result, the overall market supply remains relatively loose. The positive impact of reduced supply due to maintenance has been offset by high inventories, failing to provide effective support for prices. In terms of inventory, the industry's overall inventory level is maintained at a moderately high level, with continuous pressure from inventory accumulation, which further weakens the resilience of market prices.

The persistently weak demand remains the core factor weighing down market performance. Downstream terminal demand shows no clear signs of recovery, and rigid demand-driven procurement volumes remain limited, causing the overall market supply-demand balance to revert to a weak and loose equilibrium. Affected by the generally subdued market conditions, some manufacturers have begun rolling out price-reduction promotions in the latter half of the month to accelerate shipments and ease inventory pressure, leading to an increase in lower-priced goods available on the market. Considering multiple factors—including supply and demand dynamics, inventory levels, and market operations—by month-end, the methanoic acid market has completely lost its upward momentum, with the overall market trend stabilizing but leaning toward weakness. The risk of further price declines continues to accumulate.

Market Forecast: In the short term, the Chinese formic acid market lacks strong positive drivers. The supply boost from plant maintenance has gradually been absorbed, while negative factors—such as weak downstream demand, high inventory levels, and manufacturers offering price concessions to stimulate sales—continue to dominate the market. It is expected that the formic acid market will maintain a stable-to-weaker trend with a slow downward trajectory going forward. Specific developments will still depend on changes in market supply and demand.