September 1st news
According to the commodity market analysis system: In August, China's 85% mainstream formic acid market as a whole showed a trend of initially stabilizing at a low level, then increasing in a stepwise manner, and finally ending the month on a stable note, with a noticeable rise in the price floor for the entire month. At the beginning of the month, the market continued the sideways trend from the end of July, with prices at the lowest level of the year, at a benchmark price of 1,800 CNY/ton. During the month, supported by multiple positive factors such as low inventory, plant maintenance, export growth, and market price support, prices gradually broke through the low range, with the center of gravity continuously shifting upwards. By the end of the month, the market maintained a stable operation at a high level, with a benchmark price of 2,100 CNY/ton. Overall, the month saw a strengthening trend, with a price increase of 16.7% during the month.
The supply and demand dynamics dominated the market trends this month, forming a clear pattern of phased competition.
Supply Side Overall, it shows characteristics of "offsetting resumption of production and maintenance reduction, with periodic tightening of supply." At the beginning of the month, previously shut-down facilities are scheduled to resume operations, leading to an expectation of increased supply, which continuously suppresses prices and is the core reason for the low price fluctuations at the start of the month. Mid-month, some facilities undergo concentrated maintenance, offsetting the increase in supply, leading to a tightening of market supply. Coupled with companies actively maintaining prices, this provides core support for price increases. By the end of the month, industry inventory slightly increases, alleviating supply-side pressure, and the market tends to stabilize. Additionally, throughout the month, the overall industry inventory remains at a medium to low level, providing continuous fundamental support for the spot price of formic acid, effectively limiting the downward price space.
On the demand side, the overall situation shows “weak rigid demand coupled with marginal positive factors providing support,” which is a key constraint on market volatility. This month, downstream end-users in China have generally exhibited weak rigid demand, and the pace of demand recovery has been slow, making it difficult to generate sustained upward momentum. As a result, for most periods, the market has lacked the core support needed for significant price rallies, leading to repeated episodes of sideways trading and weak equilibrium. However, phased positive factors have effectively driven the market upward: lower prices have prompted downstream users to replenish their inventories in stages; coupled with steady performance in export orders throughout the month and rising expectations for the traditional peak demand season in September, these factors have significantly boosted market sentiment, stimulated a rebound in trading volumes, and spurred multiple rounds of price increases.
September demand peak season arrives, and prices are expected to continue rising.
As the traditional peak demand season in September approaches, demand is expected to continue to recover, coupled with the ongoing sentiment of price support in the industry. The formic acid market is likely to maintain a stable and slightly strong trend, with a low probability of significant fluctuations. Specific developments will still need to be monitored based on changes in market supply and demand.
