SunSirs: Formic Acid Prices Rose Initially, Then Stabilized

Price Trend

According to the commodity market analysis system of SunSirs, the domestic formic acid market has recently exhibited a cyclical trend characterized by an initial rise followed by stabilization and sustained sideways movement. As of May 25, the benchmark price for 85% industrial-grade formic acid stood at 2,600 RMB/ton—unchanged month-on-month, but up 4% year-on-year.

The supply side is the key driver behind the current round of price increases.

Initially, manufacturers initiated a month-long maintenance shutdown; the halting of half the production units for repairs directly led to a contraction in market supply, disrupting the previously stable supply-demand equilibrium and driving prices upward. However, following this price hike, the market subsequently stabilized—a trend primarily attributable to weak support from the demand side. Current overall downstream demand remains lackluster, characterized by low purchasing enthusiasm and a sluggish pace of procurement. Consequently, manufacturers' product shipments have slowed, failing to provide the necessary momentum for continued price appreciation; this has effectively offset the bullish support derived from the supply contraction, leaving the market in a stalemate where it struggles to find direction, unable to either rise or fall.

Market outlook

Overall, the domestic formic acid market is currently in a state of weak equilibrium between supply and demand. On the supply side, the positive impact of plant maintenance shutdowns has already been fully priced in, while the sluggish trend on the demand side shows no immediate signs of improvement. In the short term, the market is expected to remain stable, with significant price fluctuations unlikely. Future market trends will depend primarily on a potential recovery in downstream demand and changes in supply resulting from plant maintenance; consequently, there is a potential expectation for minor price fluctuations. Ultimately, specific market developments will continue to hinge on shifts in the supply-demand balance.

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