SunSirs: Downstream Demand Was Being Released, and Formic Acid Prices Were Rising Steadily

Data from the SunSirs’commodity market analysis system indicates that the domestic formic acid market has recently exhibited a trend of "initial stability followed by a continuous rise," shaking off its previous sluggishness and reversing from a state of weak equilibrium to a steady upward trajectory; the supply-demand dynamic continues to improve, and trading activity is steadily picking up. As of July 6, the benchmark price for domestic industrial-grade 85% formic acid stood at 2,300 RMB/ton, marking a 13.86% increase since the end of June.

Phase 1: Sideways Consolidation

From June 29 to 30, the formic acid market remained sluggish, with the mainstream average price holding steady at 2,020 RMB/ton and showing no significant fluctuation. The market overall was in a state of weak equilibrium; prevailing industry sentiment leaned bearish, and downward pressure from the preceding period persisted. However, signs of a market recovery began to emerge. Some producers slightly raised their quotes, and news of delayed restarts for industry facilities helped improve downstream purchasing sentiment and willingness to buy. This drove a steady decline in manufacturer inventories, laying the groundwork for future price increases.

Phase 2: Continuous upward movement

During the sustained upward trend from July 1 to July 3, the market experienced three consecutive days of gains, characterized by steady and consistent growth. A turning point occurred on July 1 as prices surged significantly; the average price rose to 2,100 RMB/ton, marking a 4% increase for the day. This continued strengthening of the market was driven by a combination of positive factors: robust shipment trends, sustained restocking demand from downstream end-users, and a steady decline in manufacturer inventories. The upward momentum persisted over the following two days, with prices climbing again on July 3 to reach an average of 2,300 RMB/ton—a single-day increase of 9.52%.

Market Outlook

From a fundamental perspective, industry inventories have retreated to the median range, and some enterprises are limiting shipments to tighten spot supply; meanwhile, a surge in trading activity—driven by concentrated restocking downstream—has created a confluence of favorable supply-demand factors that have decisively reversed the market's previous weakness. The formic acid market is highly likely to maintain its upward momentum.

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