Recently, the domestic market for 85% industrial formic acid has shown a pattern of first stabilizing and then rising, followed by a sideways stalemate. As of August 17th, the benchmark price of 85% industrial grade formic acid was 1900 yuan/ton, a decrease of 2.7% from the beginning of the month. The market is fiercely contested between long and short positions, and prices are influenced by inventory levels, export orders, and equipment resumption progress, resulting in an overall weak equilibrium situation.
At the beginning of the market, the spot price of formic acid remained stable at around 1800 yuan/ton for a long time. Domestic downstream terminals have not yet shown a significant rebound, and industries such as leather, medicine, and pesticides are mainly focused on essential procurement, with overall domestic demand showing a flat performance. However, the overall inventory of production enterprises is at a low level, and the supply contraction caused by early equipment maintenance has formed a bottom support for spot prices. Enterprises prioritize the execution of pre signed orders for shipments. Although some maintenance equipment has been restarted and put into operation, the new supply of goods has not fully impacted the market. The inventory advantage has allowed the market to maintain stability in stages, and the market has entered a dynamic game of supply and demand.
Subsequently, the market experienced a significant upward trend, with the average transaction price of 85% formic acid rising to 1900 yuan/ton, an increase of 5.5%. This round of price increases is not driven by domestic demand, and the core driving force comes from two aspects. Firstly, the low inventory pattern of factories continues, and the spot supply is not loose; Secondly, export orders have improved, and the increase in external demand has effectively absorbed some of the domestic production capacity, driving up spot prices.
After the price surged, the market quickly entered a sideways stalemate phase, with prices stabilizing at 1900 yuan/ton and no longer continuing to rise. The lack of sustained support from favorable factors has become the main constraint, with limited follow-up efforts from domestic downstream and a lack of sustained domestic demand to further boost the market. The pricing mentality of production enterprises tends to be cautious and conservative, and they have not chosen to actively continue to raise prices. Market trading has returned to rationality, and overall weak balance operation has been maintained.
In the future, there is a risk of release of supply side pressure, and the incremental resumption of production of maintenance equipment in the early stage will gradually flow into the market. If there is no substantial improvement in domestic demand, relying solely on inventory and export support will be difficult to sustain the upward trend, and formic acid still has certain downward expectations. Follow up market trends, with a focus on the recovery of domestic downstream production, the sustainability of export orders, and the pace of releasing new sources of goods.
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