Recently, the domestic formic acid market has maintained a horizontal and volatile pattern. As of October 19th, the benchmark price of formic acid was 2100 yuan/ton, unchanged from last week. The mutual game between long and short factors constrains the market, and there is a lack of upward or downward momentum to break through, resulting in a weak overall trading atmosphere in the market.
Weak performance on the supply and demand side
Last week, the downstream demand for formic acid showed weak performance, and the market lacked large purchase orders. Transactions were mainly supported by scattered downstream demand. Downstream enterprises have limited acceptance of the current formic acid price, and their procurement strategies remain cautious. They tend to replenish as needed and in small quantities, without any willingness to proactively stock up. The insufficient volume of terminal orders directly restricts the market transaction scale. The overall performance of production enterprises’ shipments is average, and there is differentiation in inventory situations among different manufacturers: some factories have a slower shipping pace, and temporary inventory pressure is gradually emerging; The inventory of other production enterprises is maintained within a reasonable range, and inventory pressure is relatively controllable.
Smooth and stable operation of raw materials
There were no significant fluctuations in raw materials this week, and there was no strong support or obvious drag on the price of formic acid from the cost side. The cost remained stable, making it difficult to drive the formic acid market out of a trend. The overall operation of the supply side is relatively stable, and domestic formic acid enterprises have no centralized maintenance or significant increase or decrease in production plans. The market spot supply remains stable, and there has been no extreme situation of shortage or concentrated increase in supply. The stable supply side further consolidates the foundation of formic acid’s horizontal trend.
Market sentiment is mainly wait-and-see
Downstream users mainly adopt a wait-and-see approach, not chasing high prices or hoarding goods; On the one hand, production enterprises are unwilling to publicly lower their quotations to avoid triggering market panic and price reductions. On the other hand, in the face of weak demand, they moderately offer discounts to promote orders in actual transactions. Traders also tend to be conservative in their operations, using and purchasing as needed, reducing hoarding in intermediate links, and basically absent speculative demand in the market. Under the long short game, the market is in a stalemate.
Overall, the current market demand is weak and there is no obvious positive news. The short-term formic acid market is likely to continue the stalemate pattern, and specific changes in market supply and demand still need to be monitored.
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