Recently, the formic acid market has shown a stable and sideways trend, with limited overall market volatility. As of August 10th, the benchmark price of 85% industrial grade formic acid in China was 1800 yuan/ton, a decrease of 21.74% compared to the same period last month. The price remains stable in the short-term low range, and the overall market shows obvious supply-demand game characteristics. The short-term upward momentum is insufficient, and the pressure situation in the medium and long term has not changed.
From the perspective of market supply and demand pattern, the current formic acid market is intertwined with long and short factors, forming a dynamic balance situation. The core factor supporting the current low price stabilization is the low inventory of manufacturers. Due to the low prices, downstream end customers have increased their willingness to stock up on dips, effectively consuming manufacturers’ spot inventory. The overall inventory level of the industry is at a low level, which provides solid support for spot prices and avoids further significant price declines. However, at the same time, the market’s favorable support is relatively weak, and overall terminal demand remains weak with no obvious signs of recovery. Downstream demand follow-up is insufficient, and overall market transactions are flat, which cannot drive price rebound and rise, becoming the core negative factor restricting the upward trend of the market.
From the perspective of subsequent changes in the supply side, the overall supply pressure of the industry will gradually rebound, bringing downward pressure to the future market. In the early stage, multiple formic acid production units in the industry completed shutdown maintenance. With the end of the maintenance cycle, related units gradually entered the resumption stage, and the subsequent market spot supply will steadily increase. Against the backdrop of terminal demand not yet recovering, the release of supply increment will break the current weak supply-demand balance, exacerbate the market supply-demand imbalance pattern, and lead to weak upward momentum and continuous accumulation of downward risks in the formic acid market.
Overall, in early August, the domestic formic acid market achieved low price stability supported by low inventory, but the dual negative factors of weak terminal demand and subsequent supply increment continued to suppress the market trend. The short-term market may continue to operate in a low volatility mode, and there is currently no opportunity for significant price fluctuations; In the medium to long term, with the comprehensive resumption of production of maintenance equipment, the pressure on the supply side is concentrated and released, while the demand side is difficult to quickly recover. The overall trend of the domestic formic acid market is still bearish, and there is a possibility of further price decline. Specific attention still needs to be paid to changes in market supply and demand.
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