At the beginning of September, the domestic formic acid market showed a phased trend of “stabilizing first and then rising, maintaining stability at a high level”, with a clear rhythm of market fluctuations and overall stable and orderly operation. At the beginning of the month, the market price continued its sideways trend at the end of the month, with a benchmark price of 2100 yuan/ton for 85% industrial grade formic acid. Driven by favorable costs, it completed a round of deterministic price increases, rising to 2200 yuan/ton. Subsequently, relying on the supply-demand balance pattern, it operated steadily without significant fluctuations, and the market trading atmosphere tended to be rational, with sufficient support from industry fundamentals.
There are favorable factors on the cost side, which stimulate price increases
The cost side is the core positive factor driving the upward trend of formic acid prices in early September. In the first half of this month, the prices of core raw materials such as coal continued to rise, and the center of gravity of raw material costs shifted upward, directly raising the comprehensive production costs of formic acid production enterprises. The continuous rise in costs has broken the stable pattern of the previous market, giving production enterprises sufficient confidence to adjust prices, actively raising market quotations, and promoting the smooth rise of formic acid spot prices. Against the backdrop of stable raw material prices, cost benefits continue to persist, providing solid bottom support for the price increase of formic acid and effectively eliminating the risk of price decline.
Dynamic balance of supply and demand
The fundamentals of supply and demand have dominated the market’s stability after price increases. From the supply side perspective, the overall inventory of the formic acid industry is currently in a moderate and reasonable range, with no inventory backlog, destocking pressure, and no shortage of supply or urgent inventory situation. The supply and demand inventory structure of the industry is healthy. The shipping rhythm of production enterprises has always remained stable, and the supply of goods is stable and orderly, which can match the normal demand of the market and lay the foundation for maintaining market stability. On the demand side, downstream terminal rigid demand procurement has been steadily released, without centralized replenishment or rush for goods, nor has there been a sharp decline in demand. The support of rigid demand is stable, allowing the market supply and demand to form a stage dynamic balance, effectively constraining significant price fluctuations.
Overall, the market trend of formic acid in early September is in line with the characteristics of the traditional peak season in the chemical industry, with a clear logic of cost driven price increases and stable supply and demand. The current market’s favorable factors and stable factors balance each other, with cost side favorable factors continuing to support the bottom, supply and demand sides maintaining balanced operation, and the industry showing strong price support sentiment. In the short term, 85% of the domestic industrial grade formic acid market is likely to continue its current high-level stable operation pattern, and the possibility of significant fluctuations is extremely low. The subsequent market trend will mainly rely on fluctuations in raw material prices, the recovery of downstream terminal demand, and changes in industry inventory. If costs continue to strengthen or downstream demand is concentrated, there is still room for further upward movement in formic acid market prices, and specific changes in market supply and demand still need to be monitored.
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