According to the Commodity Market Analysis System of SunSirs, the domestic formic acid market has recently exhibited a stepped upward trend—characterized by initial stability followed by a rise, and finally stabilizing at a high level. Overall market activity has continued to increase, and the central price level has steadily shifted upward. As of September 14, the benchmark price for industrial-grade formic acid stood at 2,400 RMB/ton, marking a 14.29% increase from the 2,100 RMB/ton recorded at the beginning of the month. Over the past week, the market transitioned from a state of balanced supply and demand—where prices remained flat—to an upward trend driven by recovering demand and cost support; it ultimately stabilized at a cyclical high. The industry is clearly operating with a trend of steady-to-strong performance, and bullish sentiment in the market is robust.
Prices have embarked on a two-stage steady upward trend, fully revitalizing market activity. Driven by the seasonal consumption boost associated with the approaching Mid-Autumn Festival and National Day holidays, expectations for downstream inventory stocking have intensified, serving as the primary catalyst for this round of price increases. Major producers positioned themselves ahead of the market rally by collectively raising ex-factory quotes; this directly drove an initial upward shift in the market's central price level, with the average transaction price rising by 4.55% to 2,300 RMB/ton. Following the price hikes, the market showed no signs of a pullback; even a slight rise in industry inventory levels failed to dampen the market trend, as the sustained release of downstream stocking demand effectively offset the inventory growth, thereby reinforcing the rationale for maintaining higher prices.
Subsequently, market prices climbed again, breaking through the previous consolidation range; the average transaction price rose to 2,400 RMB/ton—a single-day increase of 4.35%—marking the second round of significant gains for the week. This price rally was not driven by demand alone but resulted from the synergistic effect of favorable factors on both the cost and demand sides. On the cost side, rigid support established a solid price floor for formic acid, effectively limiting downside potential. On the demand side, the arrival of the peak stocking season for the dual holidays led to a continuous marginal improvement in downstream purchasing, fostering a positive trading atmosphere. Meanwhile, producers demonstrated a clear intent to push prices higher, and a reluctance to sell—driven by expectations of further increases—gained momentum, further propelling prices steadily upward.
Towards the end of last week, the formic acid market stabilized, with prices holding firm in the high range of 2,400 RMB/ton; the market saw no significant fluctuations and entered a phase of digesting these high price levels. Solid cost-side support remained the cornerstone of this stability, while the positive market sentiment—driven by earlier price increases—persisted, ensuring that bullish expectations did not fade. Although prices have temporarily leveled off, there is still room for downstream restocking demand to materialize, and with the industry's supply-demand dynamics continuing to improve, the market retains the potential for further upward movement.
Current urea inventories at manufacturers stand at 1.6757 million tonnes—a historical high—marking a slight week-on-week increase of 0.28%. The destocking process has stalled, exerting downward pressure on price elasticity. Apparent consumption in August reached 5.52 million tonnes, up 7.54% year-on-year. This indicates that overall demand is not weak; rather, the core issue lies in the fact that the growth rate of supply is outpacing that of demand.
Overall, the market rally is driven by three core factors: the surge in demand associated with stocking up for the dual holidays, rigid cost support, and manufacturers' efforts to maintain price levels; meanwhile, the sustained improvement in the supply-demand balance provides a solid fundamental basis for rising prices. Looking at the short term, favorable factors for the formic acid industry persist, with downstream stocking demand expected to continue materializing and cost support remaining firm. The market is likely to maintain a steady-to-strong trend, with the potential for further price increases. Moving forward, key areas to monitor include the pace of concentrated downstream stocking, fluctuations in raw material costs, and changes in industry inventory levels.
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