Price trend:

According to the commodity market analysis system of SunSirs, the domestic price of formic acid has been stable recently. As of December 12, the benchmark price of 85% industrial grade formic acid in China was 2,910 RMB/ton, which was the same as the same period last week (December 5), up 2.83% month-on-month and up 4.86% year-on-year.

Supply side: Significant phased contraction, concentrated capacity disruptions

The combined effects of production cuts and maintenance shutdowns by enterprises: A manufacturer in Feicheng, Shandong Province, implemented a second round of production cuts, keeping daily output at a low level; a production enterprise in Liaocheng continued to carry out maintenance on some of its facilities. The simultaneous contraction of production capacity in the two major regions directly reduced the market supply.

Inventory and Demand: A Weak Equilibrium Suppressed Price Volatility

High inventory levels buffered supply contraction: Despite the continued reduction in supply, industry inventory remained at a medium-to-high level, and inventory played a significant role in filling the supply gap.

Weak downstream demand was limiting upward momentum: Traditional demand sectors for formic acid were performing poorly: the feed industry was in a seasonal adjustment period, with weak growth in demand from the livestock sector; the leather and textile industries were operating at rates below 60%; the pharmaceutical and chemical sectors were only maintaining rigid, on-demand purchasing, with overall consumption capacity insufficient. Demand in emerging sectors (hydrogen energy storage and transportation, flow batteries) had not yet reached a significant scale, making it difficult to support price increases in the short term.

Cost side: Stable raw material prices provided support

The methanol market, a key feedstock for formic acid production, remained stable at high levels. Lower port imports and strong demand for olefins in inland areas supported raw material prices, with no significant downward pressure on costs. Meanwhile, prices of auxiliary feedstocks such as sulfuric acid were stable, keeping production costs for enterprises within a reasonable range, providing fundamental support for stable formic acid prices.

Market Forecast:

According to analysts at SunSirs, formic acid entered a period of equilibrium. Traders' pricing intentions were stable, and downstream procurement was mainly based on replenishing inventory as needed. Prices are running stably and are expected to remain stable in the short term. And, specific market changes still need to be monitored.

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