Formic Acid Shows a Stepped Downward Trend in Early June

June 8 news

According to the commodity market analysis system: In early June, the overall 85% formic acid market in China showed a continuously weak, step-down trend, with prices generally fluctuating downward. As of June 8th, the benchmark price of formic acid was 2,400 CNY/ton, unchanged from the previous period, and down 2% year-on-year. The formic acid market in early June can be divided into three clear stages, with the overall decline gradually intensifying.

The first phase was the initial round of adjustments on June 1, when the mainstream average price of 85% specification formic acid was reported at 2,550 CNY/ton, a 2% decrease from the previous day, marking the start of a weak market trend for the week. The core reason for this round of decline was the concentrated price reductions by Chinese producers, which led to an overall downward shift in market quotations. At the same time, terminal demand remained persistently weak. Downstream enterprises, influenced by the expectation of further price declines, became more cautious in their purchasing, resulting in weaker transactions based on actual market needs, setting the tone for a weak market performance throughout the week.

The second phase was the sideways consolidation and hidden decline phase from June 3 to June 5. On June 2, the market price of formic acid remained unchanged from the previous trading day, holding at 2,550 CNY/ton, which was a short-term consolidation and recovery after a significant drop. The market did not show any signs of recovery, and the weak demand situation had not improved. Downstream purchasing confidence was low, and overall transactions continued to shrink. On June 3, the market broke down again, with the average mainstream price falling to 2,500 CNY/ton, a single-day price decrease of 2%. The market further weakened, and manufacturers in the industry began to engage in covert price competition to secure orders, leading to a shift in the market pricing model. A more flexible, case-by-case pricing approach became widespread. From June 4 to June 5, the average mainstream price of formic acid stabilized at 2,500 CNY/ton for two consecutive trading days. Although the quoted prices appeared stable, the actual market transactions continued to weaken, with undercurrents of instability. Competition among manufacturers in the industry intensified, and most producers offered varying degrees of discounts to compete for limited market orders. The flexible, case-by-case pricing model became universally adopted, directly causing market transaction prices to become chaotic and significantly divergent. The seemingly stable quoted prices did not reflect the true, weaker market conditions, and the overall trading atmosphere in the market remained depressed.

The third phase, which began on June 8, was characterized by a sharp decline, further intensifying the market’s weak performance. On that day, the average price of mainstream formic acid grades dropped significantly to 2,400 CNY per ton, a 4% decrease from the previous trading day—marking the largest single-day price drop this week. During this phase, the conflict between supply and demand in the market reached a full-blown escalation: downstream end-users showed weak support for immediate purchases, while producers faced considerable pressure to offload their inventories. Major manufacturers continued to step up their price concessions, leading to increasingly pronounced divergence in transaction prices. Overall, price dispersion became particularly prominent, and the phenomenon of selling at lower prices to boost volume has become commonplace in the industry.

Future price forecast:

As visible on Xianhuotong, the short-term moving average for formic acid is currently above the long-term moving average, indicating a downward price trend.

The price is at a low level, with limited room for further decline.

Combining the core logic of the market, the current supply and demand for formic acid in China is weak, and the situation is unlikely to change. It is expected to fluctuate downward in the short term, but specific developments still need to be monitored based on changes in supply and demand in the Chinese market.