SunSirs: Costs Fell, and the Price of Formic Acid Followed the Decline of Raw Materials (November 15-22)

Price trend

According to the data from SunSirs’ bulk list, as of November 22, the average price of formic acid companies was 5,000 RMB/ton, which was 33.33% lower than the price on last Monday (November 15). It was a decrease of 37.89% compared with the price on October 22 and it rose by 47.06% in a three-month cycle.

Analysis review

This week (11.15-11.22), the domestic market price of industrial grade 85% formic acid dropped sharply. Recently, the prices of raw materials methanol, caustic soda, liquid ammonia, and sulfuric acid have all declined, and the cost support for formic acid has been significantly weakened. The price of formic acid has fallen sharply with raw materials, and the focus of transactions has declined. Downstream companies mainly purchased on-demand.

In terms of cost: upstream caustic soda, the price of caustic soda went down this week (11.15-11.21), the market price in Shandong at the beginning of the week was 1,262.5 RMB/ton, and the average price in the Shandong market at the weekend was 940 RMB/ton, with a price drop of 11.53%;Upstream liquid ammonia, on November 19, the Shandong liquid ammonia market was weak, and the price continued to fall, around 100 RMB/ton, and most manufacturers' quotations were adjusted downwards, with a range of 100; Upstream sulfuric acid, the domestic sulfuric acid market fell on November 19, the upstream sulfur market recently fell slightly, cost support was insufficient, some sulfuric acid manufacturers under-operated, the load decreased, the downstream formic acid and bromine market fell slightly, and the downstream purchasing enthusiasm weakened; Upstream methanol, on November 19, the methanol reference price was 2,748.33 RMB/ton, a decrease of 9.59% compared with the price on November 15 (3,040 RMB/ton), and a decrease of 12.94% compared with the price on November 1 (3,156.67 RMB/ton).

Market outlook

Formic acid analysts of SunSirs believe that the recent decline in raw material prices has formed a negative suppression on formic acid; dragged down by the cost, market confidence is insufficient; the support from the supply and demand side is acceptable. It is expected that the formic acid market may consolidate weakly in the short term.

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