Recently, the domestic formic acid market has shown a trend of “rapid bottoming out first, followed by sustained sideways”. As of May 7th, the benchmark price of 85% industrial grade formic acid in China was 2400 yuan/ton, a decrease of 20% month on month and 20.88% year-on-year.
April 27th is the key point for the current round of formic acid price decline, and the market has experienced a significant drop in prices. On that day, the mainstream transaction average price of formic acid with 85% content in China fell to 2400 yuan/ton, a significant decrease of 7.69% from the previous working day, and the price once again broke the recent low. This round of price decline is not a sudden market trend. During the weekend, some formic acid manufacturers have taken the lead in opening a low-priced shipping mode, actively offering discounts to clear inventory, which has directly become the main reason for the market price decline. The weakness on the demand side further amplified the downward pressure. At that time, the downstream terminal market had a strong wait-and-see attitude, and most buyers predicted that there was still room for a downward trend in market prices. The willingness to actively stock up was weak, with only a small amount of essential replenishment. The overall market transactions were light, and the supply-demand imbalance pushed the price of methyl acid to quickly bottom out. After the price hit bottom, the formic acid market quickly stopped falling and stabilized, and began a continuous sideways consolidation mode from April 28th.
After the end of the May Day holiday, there was no significant change in the domestic formic acid market on May 6th, and the horizontal stability pattern continued. The mainstream transaction average price of 85% formic acid remained stable at 2400 yuan/ton. The market supply and demand structure remained basically stable before and after the holiday, with no positive news such as production cuts or shortages on the supply side, and the supply of goods remained sufficient and stable. There has been a slight positive change in inventory levels, driven by the concentrated shipment of low-priced orders before the holiday, and some production enterprises have experienced a slight decline in inventory during the holiday period compared to the previous period, which has slightly eased the inventory pressure in the industry. However, there has been no substantial rebound on the demand side, and downstream terminals are still dominated by rigid procurement. The overall trading pace in the market is slow, lacking significant upward momentum.
In the future, the trend of formic acid market will highly rely on the recovery of downstream demand. If the operating rate of the terminal industry increases in the future and the demand for concentrated replenishment is released, it is expected to drive market trading to recover and promote price stabilization and recovery; If demand continues to be weak, the market may continue the weak pattern of “stable pricing and actual profit sharing”. Specific attention still needs to be paid to changes in market supply and demand.
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