According to the commodity market analysis system of SunSirs, the domestic market for 85%-concentration formic acid in May exhibited a phased trend characterized by initial stability followed by a rise, subsequent stabilization, and a weakening bias toward the end of the month. At the beginning of the month, prices hovered steadily around a baseline of 2,400 RMB/ton. By mid-month, prices experienced a temporary uptick—rising to 2,600 RMB/ton—driven by positive factors such as facility maintenance shutdowns and a resulting contraction in supply. Subsequently, prices stabilized and held steady, weighed down by sluggish demand. Toward the end of the month, market supply-demand imbalances became more pronounced, and the overall market trend shifted to one of stability with a downward bias.
Early May: The market traded sideways and stabilized, while a weak underlying trend gradually became more pronounced.
In early May, the domestic formic acid market continued the sideways consolidation trend observed at the end of April, holding steady at 2,400 RMB/ton with no price fluctuations; the overall pace of market operations remained stable. On the supply side, overall operating rates remained steady, with no significant production cutbacks reported by manufacturers, ensuring an ample supply of goods in the market. Regarding inventory levels—thanks to manufacturers engaging in concentrated, low-priced shipments prior to the holiday—stockpiles at some enterprises saw a slight decline during the May Day break; this provided some short-term relief from inventory pressure, thereby supporting the stability of market prices. The demand side, however, remained consistently weak; downstream enterprises undertook no concentrated restocking activities, limiting their purchasing solely to meeting immediate daily operational needs. Consequently, the overall pace of market shipments remained sluggish, resulting in a supply-demand dynamic characterized by a weak equilibrium.
As the market progressed through the first ten days of the month, bearish factors and bullish expectations gradually came to the fore. On one hand, the downstream market generally adopted a bearish sentiment; lacking any substantial positive catalysts, formic acid prices gradually accumulated downside risk, while industry inventories trended toward the upper-middle range and continued to accumulate slowly. On the other hand, news of facility maintenance within the industry began to circulate; with various enterprises scheduling maintenance shutdowns for the middle-to-late part of the month—specifically toward the end of the week—market expectations regarding a subsequent contraction in supply and a potential price rally continued to intensify, thereby laying the groundwork for a price increase mid-month. As of May 18, manufacturers within the industry officially commenced their scheduled facility maintenance—shutdowns projected to last for a full month—yet in the short term, this has not yet disrupted market prices, which remain stable at 2,400 RMB/ton.
Mid-May: Supply Contraction DrovesPrice Hike, Followed by Rapid Stabilization
May 19 marked a pivotal turning point for formic acid prices this month; driven by a significant contraction in supply, the domestic formic acid market experienced a modest, short-term upward trend—the first of its kind this year. On that day, the average market price for 85%-concentration formic acid rose to 2,600 RMB/ton—a single-day increase of 8.33%—thereby breaking the stagnant, sideways trading pattern that had persisted throughout the first ten days of the month. The primary catalyst for this price surge was the implementation of previously scheduled maintenance plans: half of the production units operated by leading manufacturers entered maintenance shutdowns, resulting in a decline in the industry's effective operating rate. Consequently, market supply contracted noticeably, leading to a brief improvement in the supply-demand balance that propelled prices upward.
Late May: Stabilizing at elevated levels, with the market showing a steady-to-weak trend
In late May, the domestic formic acid market maintained its high-level sideways trend at 2,600 RMB/ton, with prices remaining consistently stable; however, internal supply-demand imbalances within the market continued to intensify, resulting in an overall market trend characterized by stability with a weakening undertone.
On the supply side, although facility maintenance across the industry continues to advance—theoretically reducing the volume of available goods—the high baseline of industry inventories established in the preceding period means that overall market supply remains relatively ample. Consequently, the bullish impact of supply contraction resulting from maintenance is offset by these elevated inventory levels, failing to provide effective support for prices. In terms of inventory, overall industry stocks remain at a moderately high level; the persistent pressure of inventory accumulation continues to further erode the resilience of market prices.
Persistently sluggish demand remains the primary drag on market performance; downstream end-user demand shows no discernible signs of recovery, and the volume of essential procurement remains limited. Consequently, the overall market supply-demand dynamic has reverted to a state of weak equilibrium and oversupply. Influenced by this lackluster market sentiment, some manufacturers began rolling out price-cutting promotional policies in the latter half of the month—aiming to accelerate shipments and alleviate inventory pressures—leading to an increased availability of lower-priced goods in the market. Weighing a multitude of factors—including supply and demand, inventory levels, and market operations—the formic acid market at month-end completely lacked upward momentum. The overall market trend remained stable but tilted toward weakness, with the risk of subsequent price declines continuing to accumulate.
Market Outlook:
In the short term, the domestic formic acid market lacks strong bullish support. The supply-side boost resulting from plant maintenance has been gradually absorbed, while bearish factors—such as weak downstream demand, high inventory levels, and manufacturers offering price concessions—continue to dominate the market. Consequently, the formic acid market is expected to maintain a stable-to-weak trajectory, trending gradually downward in the period ahead. However, specific market developments will continue to hinge on changes in supply and demand dynamics.
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