According to the commodity market analysis system of SunSirs, the domestic market for 85% industrial-grade formic acid recently exhibited a pattern of initial stability followed by a rise, before settling into a period of stagnation. As of August 17, the benchmark price stood at 1,900 RMB/ton, down 2.7% from the beginning of the month. With intense tug-of-war between bullish and bearish forces, prices have been driven by a combination of inventory levels, export orders, and the progress of production unit restarts; overall, the market has remained in a state of weak equilibrium.
Initially, the spot price of formic acid held steady at the 1,800 RMB/ton level for an extended period. Domestic downstream demand showed no significant recovery; industries such as leather, pharmaceuticals, and pesticides engaged primarily in essential procurement, resulting in lackluster overall domestic demand. However, manufacturers maintained low inventory levels—with supply having previously tightened due to plant maintenance—providing a floor for spot prices, while companies prioritized fulfilling existing orders. Although some idled plants gradually resumed production, the influx of new supply had not yet fully impacted the market; low inventory levels allowed prices to remain temporarily stable as the market entered a phase of dynamic supply-demand interplay.
Subsequently, the market experienced a significant rally, with the average transaction price for 85% formic acid rising to 1,900 RMB/ton—an increase of 5.5%. This price hike was not driven by domestic demand; rather, it stemmed from two key factors: first, the persistence of low inventory levels at production plants, resulting in tight spot supplies; and second, robust export orders, where increased overseas demand effectively absorbed a portion of domestic production capacity, thereby pushing up spot market quotes.
After an initial price surge, the market quickly entered a phase of sideways consolidation, with quotes stabilizing at 1,900 RMB/ton rather than continuing to rise. The primary constraint was a lack of sustained momentum from bullish factors; downstream demand remained tepid, and there was insufficient domestic demand to drive further market gains. Producers adopted a cautious stance regarding pricing and refrained from actively pushing rates higher; trading activity returned to rational levels, and the market overall maintained a state of weak equilibrium.
Looking ahead, there is a risk of supply-side pressure materializing as increased output from previously idled units—following maintenance—gradually enters the market. Without a substantial improvement in domestic demand, relying solely on inventory levels and exports is unlikely to sustain a price rally, and the outlook for formic acid prices remains bearish. Future market trends will hinge on the pace at which domestic downstream operations resume, the sustainability of export orders, and the timing of new supply entering the market.
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