SunSirs: Formic Acid Stabilized Following a Sharp Decline

Price trend

According to the commodity market analysis system of SunSirs, the domestic formic acid market has recently exhibited a trend characterized by an initial rapid bottoming-out followed by a sustained period of sideways trading. As of May 6, the benchmark price for domestic 85% industrial-grade formic acid stood at 2,400 RMB/ton—a month-on-month decline of 20% and a year-on-year decline of 20.88%.

Market analysis

April 27 marked a critical turning point in the current downward trend of formic acid prices, as the market experienced a sharp plunge. On that day, the mainstream average transaction price for domestic 85%-concentration formic acid fell to 2,400 RMB/ton—a substantial decline of 7.69% compared to the previous business day—setting a new recent low. This latest price downturn was not a sudden, unexpected event; over the weekend, several formic acid manufacturers had already taken the lead in adopting a low-price sales strategy, actively offering price concessions to clear inventory—a move that directly became the primary driver behind the market's price decline. Weakness on the demand side further amplified this downward pressure; at the time, sentiment in downstream end-markets was heavily characterized by a "wait-and-see" attitude. Most buyers anticipated that market prices still had room to fall further, resulting in a low willingness to proactively build inventory; purchasing activity was limited to only small-scale replenishment to meet immediate, essential needs. Consequently, overall market trading remained sluggish, and the resulting supply-demand imbalance drove formic acid prices to quickly hit rock bottom. After prices bottomed out, the formic acid market rapidly halted its decline and stabilized, entering a phase of continuous sideways consolidation starting April 28.

Following the conclusion of the May Day holiday, the domestic formic acid market on May 6 showed no significant change in its operational trend, maintaining a pattern of sideways stability; the mainstream average transaction price for 85% formic acid remained steady at 2,400 RMB/ton. The market's supply-demand dynamics remained largely balanced both before and after the holiday; on the supply side, there were no bullish developments—such as production cuts or shortages—and product availability remained ample and stable. Inventory levels saw a minor positive shift; driven by the concentrated shipment of low-priced orders placed prior to the holiday, stock levels at some manufacturing enterprises declined slightly compared to previous periods, resulting in a modest alleviation of inventory pressure within the industry. However, the demand side did not experience a substantial recovery; downstream end-users continued to focus primarily on purchasing to meet immediate, essential needs, keeping the overall pace of market trading subdued and lacking the momentum for any significant price surges.

Market outlook

Looking ahead, the trajectory of the formic acid market will depend heavily on the strength of the recovery in downstream demand. Should operating rates in downstream industries rise—triggering a concentrated wave of restocking—market activity is expected to pick up, driving prices toward stabilization and recovery. Conversely, if demand remains sluggish, the market is likely to persist in its current weak pattern, characterized by stable quoted prices but actual price concessions. Ultimately, market developments will continue to hinge on shifts in supply and demand dynamics.

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