According to the Commodity Market Analysis System of Shengyi Society, the domestic formic acid market has shown a continuous sideways consolidation trend recently. As of January 2nd, the benchmark price of 85% formic acid in Shengyi Society was 2300 yuan/ton, which was the same as the same period last week (January 5th), a month on month decrease of 20.96%, and a year-on-year decrease of 22.03%.
From the supply side perspective, the formation of a stable market pattern began with the resolution of the trilateral talks before January 5th. The three core formic acid production enterprises in Liaocheng, Feicheng, and Jingzhou, Hubei have reached an agreement through negotiation to implement varying degrees of production reduction and price protection measures. From the subsequent market performance, although the production reduction measures did not immediately change the overall pattern of loose market supply, they effectively curbed the risk of price decline and sent a clear signal of price support. During this period, the shipment situation of upstream enterprises remained stable. Although there was no significant increase in volume, the normal sales rhythm was maintained, and the inventory level showed a mild downward trend.
The demand side performance shows a characteristic of phased changes. On January 6th, there was a clear downstream wait-and-see sentiment in the market, with buyers mainly focusing on maintaining rigid demand, resulting in a relatively light trading atmosphere. But as prices remain stable for a long time, the purchasing pace of downstream enterprises gradually tends to stabilize. By January 12th, the market demand side has formed a stable purchasing trend. It is worth noting that on the 12th, there was a slight discount for end customers with large orders in the market, but this partial adjustment did not shake the overall trend of strong mainstream prices.
On the cost side, methanol, the main raw material for formic acid production, showed a trend of recovery and fluctuation in the market during the same period. From January 4th to 9th, the methanol quotation at East China ports increased from 2245 yuan/ton to 2265 yuan/ton. The mild support on the cost side also provided favorable conditions for formic acid enterprises to raise prices. Based on the comprehensive supply-demand relationship and cost factors, the current formic acid market has formed a balanced pattern of “loose supply but reduced production to support the bottom, stable demand and orderly procurement, and moderate cost support”.
Formic acid data analysts believe that based on the stable performance of both supply and demand, strong willingness of enterprises to raise prices, and a benign cycle of mild inventory decline, it is expected that the domestic formic acid market will continue to maintain a sideways consolidation trend, with limited room for price fluctuations. We need to focus on the continued implementation of upstream production reduction measures and the further release of downstream demand in the future.
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