SunSirs: Formic Acid Stabilized After a Phase of Significant Decline

Data from the SunSirs commodity market analysis system indicates that the domestic formic acid market has recently shown a trend of initial decline followed by stabilization, remaining generally weak overall. As of June 15, the benchmark price for 85% formic acid stood at 2,200 RMB/ton, marking a month-on-month decrease of 8.33% and a year-on-year drop of 10.2%.

Phase 1: Rapid Decline

Between June 8 and June 10, prices fell by 8.33%. Market imbalances between supply and demand became pronounced, and industry competition intensified; manufacturers generally offered price concessions to secure orders, adopting a flexible "negotiated pricing" model that resulted in a wide divergence of transaction price ranges. Against the backdrop of a persistently weak market, downstream buyers remained extremely cautious, and demand driven by essential needs was insufficient. This further compelled manufacturers to lower prices to boost sales volume, driving market prices down sharply.

Phase 2: Sideways Consolidation

From June 11 to June 15, the price stabilized at 2,200 RMB/ton. Following the earlier sharp price drops, the market's demand for low-priced sales was partially released, leading to a slight improvement in shipment volumes; however, this was merely a short-term, localized recovery that failed to alter the market's overall weak trend.

Fundamentals: High inventories combined with weak demand

Last week, overall inventory levels in the domestic formic acid industry remained in the upper-medium range, with relatively ample market supply. Furthermore, the restart of certain production units following maintenance faced potential delays; however, the lack of any significant supply-side contraction in the short term continued to exert downward pressure on market prices.

Downstream demand remained sluggish, with no signs of concentrated restocking or a surge in essential purchasing. Amid the ongoing market decline, downstream buyers generally adopted a wait-and-see approach, opting to purchase only as needed and replenish stocks in small quantities, resulting in overall low enthusiasm for procurement.

Market Outlook

Considering market supply and demand, formic acid prices are highly likely to continue fluctuating at low levels with a weak trend in the near future. Specific attention should be paid to shifts in supply and demand, the pace of industry inventory depletion, and the actual progress of plant maintenance and production restarts.

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