SunSirs: The Supply-Demand Contradiction in the Formic Acid Market Was Prominent, and Prices Were Declining

Price trend

According to the business data analysis system of SunSirs: at the end of 2025, the price of formic acid declined. As of January 5, 2026, the benchmark price of domestic 85% industrial-grade formic acid on SunSirs was 2,300 RMB/ton, a decrease of 8.6% compared to 2,500 RMB/ton on December 24, 2025.

The recent price trend of formic acid in the domestic market can be clearly divided into two core stages, exhibiting an overall characteristic of "rapid decline followed by stabilization and sideways movement":

The first phase was a period of price decline (December 24th-25th). On December 24th, the domestic formic acid market remained stable, with the mainstream transaction price maintaining at 2,500 RMB/ton, but the market already harbored underlying downward risks. With the completion of maintenance and resumption of full-capacity operation at the main plant in Liaocheng, and the expected commissioning of new production capacity in Jingzhou, Hubei, coupled with high social inventory levels, the supply-demand imbalance intensified. The following day (December 25th), market prices experienced a significant decline, with the mainstream transaction price falling to 2,300 RMB/ton, a single-day drop of 200 RMB/ton, a decrease of nearly 8%, clearly indicating a downward market trend.

The second phase was a period of sideways consolidation (December 26th - January 5th). From December 26th onwards, the domestic formic acid market entered a period of sideways consolidation, with the mainstream transaction price remaining stable at 2,300 RMB/ton. During this period, despite increasing supply-side pressure (such as a new plant in Hubei operating at full capacity, increasing daily supply by 600 tons), prices did not fluctuate significantly, and the market entered a brief stalemate between supply and demand. Although the price system did not directly break down until January 5th, the actions of some manufacturers supplying end-users at lower prices during the holiday period showed signs of price softening.

Analysis of key influencing factors

Supply side: The combination of increased production capacity and high inventory levels established a loose market situation

Recently, the supply side of the formic acid market continued to expand, becoming the core factor suppressing prices. On the one hand, new production capacity was released in a concentrated manner. The main production facility in Liaocheng had completed maintenance and resumed full-capacity operation, and the new production capacity in Jingzhou, Hubei, had been successfully put into operation and gradually increased to full capacity. The large factory in Hubei alone had increased the domestic daily supply by 600 tons, significantly boosting overall market supply. On the other hand, inventory pressure remains high. Previously accumulated inventory remains at a moderately high level and has not been fully digested, and the new production capacity had further exacerbated inventory accumulation, leading to continuously increasing pressure on companies to reduce inventory. Against this backdrop, manufacturers had proactively lowered their prices to alleviate inventory pressure. Although prices stabilized temporarily, easing measures such as targeted low-price supply reflected the passive situation on the supply side.

Demand side: Strong wait-and-see sentiment and weak purchasing willingness were hindering price recovery

The weak performance on the demand side had further exacerbated the supply-demand imbalance in the market. Since December 24th, downstream buyers generally adopted a wait-and-see attitude, and trading activity remained sluggish. Even after prices fell on December 25th, the wait-and-see sentiment in the end market did not ease, but rather intensified. Most buyers preferred to wait for prices to stabilize before making purchases, resulting in low market demand. Until January 4th, demand remained primarily driven by essential needs, with no signs of a substantial recovery. At the same time, end-users generally held a cautious and bearish outlook on future prices, further suppressing proactive purchasing behavior and preventing the formation of effective demand to support a price rebound.

Market Outlook:

According to SunSirs' formic acid data analyst, considering the current market supply and demand pattern and price system changes, the domestic formic acid market is expected to remain "stable with a weakening trend" in the short term, and prices may further decline. Further developments will depend on changes in market supply and demand.

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