According to the Commodity Market Analysis System of Shengyi Society, the formic acid market has been fluctuating and weakening recently. As of September 15th, the benchmark price of industrial grade 85% formic acid in China was 3100 yuan/ton, a decrease of 3.73% compared to last week (September 8th), a month on month decrease of 6.63%, and a year-on-year increase of 15.89%.
The formic acid market has experienced a transition from expected support to actual weakness
From September 8th to September 10th, the market focused on the expected supply contraction brought about by the maintenance plan of Liaocheng factory. Although the insufficient downstream operating rate in China constrained domestic demand, the stable performance of the export side formed a certain support, and prices showed a temporary balance under the supply-demand game. At this stage, the market sentiment is cautious and optimistic, and traders are mostly adopting a wait-and-see attitude waiting for the maintenance to be implemented. ​
On September 11th, the price of formic acid was lowered by 120 yuan/ton, and the operating rates of downstream major application fields such as agriculture, leather, and chemical industry continued to be low, resulting in weak demand for terminal procurement; Secondly, the maintenance plan for the Liaocheng factory was not executed as scheduled, and the market’s expectations of supply contraction were dashed, resulting in a loss of confidence among traders and a general wait-and-see attitude towards holding money, leading to a sluggish trading atmosphere in the market.
Among the main downstream industries of formic acid, the agricultural sector is currently experiencing a seasonal adjustment period, and the demand for feed additives is growing weakly; The leather and textile industries are affected by sluggish terminal consumption, and the operating rate remains below 60%; Although there is a rigid demand in the chemical and pharmaceutical industry, the procurement pace has slowed down, and the overall trend is characterized by “on-demand procurement”. The combined effect of weak demand in multiple fields has significantly reduced the domestic market’s ability to digest. ​
The formic acid data analyst from Shengyi Society believes that the mentality of traders has undergone a rapid change from expectations for the peak season of “Golden September and Silver October” in early September to concerns about weak demand in mid September. The formic acid market is in a weak and volatile pattern, and in the short term, the market is likely to remain in its current stalemate. It is necessary to closely monitor the progress of maintenance plans and the opportunities for breaking through downstream demand changes.