Price trend

According to the business data analysis system of SunSirs, after a slight rebound in formic acid prices in mid-January, the domestic formic acid market has recently shown a stable, sideways trend. The mainstream transaction price remained stable at 2,350 RMB/ton, without significant fluctuations. The core characteristic of the market during this period was the dynamic interplay between supply and demand. The expected maintenance shutdowns on the supply side and the pre-holiday demand on the demand side were interacting, jointly contributing to price stability. The overall industry was exhibiting a "reduced volume, stable price" operating pattern.

The supply side was the core variable influencing the market during this cycle

From January 27th to January 29th, the market's main focus was on the planned maintenance of a key production facility in Liaocheng. At that time, the facility had not yet begun maintenance, but the expectation of maintenance was already providing effective support to the market. During this period, overall market sales remained at a moderate level, and industry inventory was also in the middle range. The reasonable inventory and sales pace laid the foundation for price stability.

On January 30th, the planned maintenance officially began, with a factory in Liaocheng starting maintenance on its 100,000-ton formic acid plant. This led to a substantial reduction in market supply, making the tightening of supply a certainty. On February 2nd, the impact of the maintenance continued to unfold, further reducing overall market supply. However, due to the industry's moderate inventory levels and the continued effectiveness of production reduction and price stabilization policies, the supply gap caused by the reduction was partially offset by existing inventory, preventing market supply shortages and upward price fluctuations.

Demand side: "Driven by essential needs, with limited growth potential."

As the Spring Festival holiday approaching, downstream companies generally adopted a more cautious procurement approach, abandoning their previous wait-and-see attitude and shifting to a demand-driven purchasing model. They were primarily focusing on meeting immediate production needs with essential purchases, and there was no large-scale pre-holiday stockpiling. Market purchasing activity remained relatively stable. Looking at the overall performance of downstream industries, traditional formic acid demand sectors such as feed, leather, and printing and dyeing were experiencing a seasonal lull, with operating rates below 60% and limited consumption capacity.  Meanwhile, sectors like pharmaceuticals and chemicals were only maintaining small-scale essential purchases, failing to provide any substantial driving force to the market.

Market outlook

According to SunSirs' formic acid data analyst, as the Spring Festival holiday approaching, market trading activity is likely to further decline, and downstream companies' purchasing demand will most likely remain focused on essential needs. On the supply side, the main production facility in Liaocheng is still undergoing maintenance, and market supply will remain constrained. The supply-demand balance is unlikely to be disrupted in the short term. It is expected that the domestic formic acid market will continue to consolidate horizontally in the short term, with mainstream prices remaining around 2,350 RMB/ton.

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