SunSirs: Low Demand for Formic Acid and Low Inventory Coexisted

Price trend

According to the commodity market analysis system of SunSirs, the price of formic acid has been mainly adjusted upward recently. As of August 18, the domestic 85% industrial-grade formic acid SunSirs benchmark price was 3,360 RMB/ton, up 25.84% from the beginning of the month, up 40% from the previous month, and up 21% from the same period last year.

Analysis review

Mainstream manufacturers adopted a limited supply strategy, resulting in a significant reduction in supply

Mainstream domestic companies were implementing volume-controlled sales policies, resulting in a continued tightening of the market supply side. Factory operating rates were low, and formic acid inventories were at historically low levels.

Low demand and low inventory levels were occurring in the formic acid market

This price increase lacked substantial demand support. Domestic terminals were still purchasing based on basic needs, and the market trading atmosphere was stable. The inventory pressure may continue to accumulate, and coupled with the impact of the traditional off-season demand, there is no further momentum for increases.

Companies were still planning production cuts

As of August 18, a major manufacturer in Shandong Province may be planning to reduce production due to preparations for an important event, leading to a tight market supply.

Market outlook

Data analysts of SunSirs believe that the tight supply situation is difficult to change, and Shandong's production restrictions will continue until the end of the campaign (expected in early September). Combined with the support of export orders, prices may remain high and fluctuate. Specific changes in market supply and demand still need to be paid attention to.

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