June 15th, news:
The commodity market analysis system shows that the recent Chinese formic acid market has generally shown a trend of first falling and then stabilizing, with an overall weak trend. As of June 15th, the benchmark price for 85% formic acid was 2,200 CNY/ton, down 8.33% month-over-month and 10.2% year-over-year.
Phase 1: Rapid Decline
From June 8 to June 10, prices fell by as much as 8.33%, highlighting a growing supply-demand contradiction in the market and intensifying industry competition. Manufacturers generally resorted to offering discounts and incentives to win orders. The market adopted a flexible pricing model of “price negotiation for each order,” resulting in a significant divergence in transaction price ranges. Coupled with the ongoing weakening of the market, downstream end-users have become extremely cautious about placing orders, with demand driven by essential needs remaining insufficient. This has further compelled manufacturers to lower prices and boost sales volume, thereby driving market prices sharply downward.
Second Stage: Sideways Consolidation
June 11-15, the price stabilized at 2,200 CNY/ton. After a significant price reduction earlier, the demand for low-price sales in the market was partially released, and the shipping situation improved slightly, but this was only a short-term local improvement and did not change the overall weak market situation in China.
Fundamentals: High Inventory Coupled with Weak Demand
This week, China's formic acid industry maintained an inventory level that is slightly above average, with relatively sufficient market supply. Additionally, there is a possibility of delays in the resumption of production for some plants undergoing maintenance. In the short term, there are no significant supply-side contractions that would benefit the market, which continues to put downward pressure on prices.
Downstream terminal demand has consistently been in a weak state, with no concentrated restocking or significant release of rigid demand. Affected by the continuous decline in market conditions, downstream users generally adopt a wait-and-see attitude, mostly operating on a buy-as-you-need and small-order replenishment model, resulting in overall low enthusiasm for purchasing.
Future Market Forecast:
SpotCom visible: Currently, the formic acid price in China is showing a negative widening trend, meaning the 10-day moving average is below the 20-day moving average, and the difference between them is expanding.
Considering the current price level, the price is currently at a low position, and the downward space is limited.
Combining market supply and demand, it is highly likely that formic acid will continue to oscillate at a low level and operate in a weaker trend. Specifically, attention still needs to be paid to the changes in market supply and demand, the progress of inventory digestion in the industry, and the resumption of production after plant maintenance in China.
