SunSirs: Formic Acid Prices Were Consolidating Sideways, with Planned Plant Maintenance in the Future

Price trend

According to the commodity market analysis system of SunSirs, the price of formic acid has been consolidating recently. As of February 28, the benchmark price of 85% industrial grade formic acid on SunSirs was 2,450 RMB/ton, which is the same as before the Spring Festival.

Market analysis

In terms of supply, demand, and inventory, the current market is in dynamic equilibrium, and overall inventory levels are controllable. On the supply side, formic acid production has remained relatively stable recently. Regarding inventory, domestic formic acid producers' inventories are generally in the upper-middle range, with overall inventory levels under control. There is neither significant pressure to reduce inventory due to overstocking nor supply shortages. Inventory levels are within a reasonable range, ensuring market price stability.

The planned plant maintenance in March will be a key variable disrupting the current balance and influencing market trends. According to market sources, two large formic acid producers in Shandong (Asder and Luxi Chemical) with a combined capacity of 350,000 tons are scheduled for maintenance in March. This maintenance will directly reduce the total market supply, potentially disrupting the current supply-demand balance. Meanwhile, with rising temperatures, downstream industries will gradually enter a demand recovery period in March and April, and market demand is expected to see a slight increase. The supply-demand situation is likely to shift towards a "tight supply, increased demand" balance, thus supporting formic acid prices and potentially leading to a temporary price increase.

Market outlook

According to analysts at SunSirs, the domestic formic acid market is currently in a stable consolidation phase, characterized by stable prices, balanced supply and demand, and manageable inventory. The planned maintenance shutdowns of large-scale plants in Shandong in March and the anticipated recovery in downstream demand will be key factors influencing market trends. Specific developments will depend on the implementation of these maintenance shutdowns and changes in market supply and demand.

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