According to the Commodity Market Analysis System of Shengyi Society, after a slight rebound in formic acid prices in mid January, the domestic formic acid market has shown a stable horizontal consolidation trend in recent days, with mainstream transaction prices continuing to stabilize at 2350 yuan/ton without significant fluctuations. The core feature of this stage of the market is the dynamic game between supply and demand, where the expected maintenance on the supply side interacts with the demand side’s urgent support before the holiday, jointly promoting price stability. The industry as a whole presents a stable operating pattern of “quantity reduction and price stability”.
The supply side is the core variable that affects the market during this cycle
From January 27th to January 29th, the core focus of the market was on the maintenance plan of a major production facility in Liaocheng. At that time, the facility had not yet started maintenance and was only in the expected maintenance stage, but this expectation had already formed effective support for the market. During this period, the overall market shipment rate remained at a moderate level, and industry inventory was also in the median range. A reasonable inventory and shipment rhythm laid the foundation for stable prices.
On January 30th, the expected maintenance officially landed, and a factory in Liaocheng launched a 100000 ton formic acid plant maintenance, resulting in a substantial reduction in market supply and a tightening of the supply side becoming an established fact; On February 2nd, the impact of maintenance continued to be released, and the overall market supply further contracted. However, due to the industry inventory being at a median level in the early stage and the continued effectiveness of production reduction and price protection policies, the gap caused by supply reduction was partially offset by reasonable inventory, which did not cause market supply tension or drive upward price fluctuations.
Demand side, ‘rigid demand driven, limited incremental’
As the Spring Festival holiday approaches, downstream enterprises generally tend to be cautious in their procurement mentality, abandoning the previous wait-and-see attitude and shifting to an on-demand procurement model, mainly focusing on rigid procurement to meet immediate production needs. There has been no large-scale pre holiday stocking behavior, and the market procurement intensity is relatively stable. From the overall performance of downstream industries, traditional demand areas for formic acid such as feed, leather, and printing and dyeing are in a seasonal off-season, with a production rate of less than 60% and limited consumer digestion capacity. Meanwhile, the pharmaceutical and chemical industries only maintain a small amount of essential procurement, which cannot form substantial driving force for the market.
The formic acid data analyst from Shengyi Society believes that as the Spring Festival holiday approaches, market trading activity may further decline, and downstream enterprise procurement demand is likely to continue to be dominated by rigid demand. On the supply side, the maintenance of the main equipment in Liaocheng is still ongoing, and the market supply will remain in a contracted state, making it difficult to break the supply-demand balance pattern in the short term. It is expected that the domestic formic acid market will continue its sideways consolidation trend in the short term, and the mainstream price will remain around 2350 yuan/ton.
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