According to the Commodity Market Analysis System of Shengyi Society, the price of formic acid has been strengthening recently. As of around November 17th, the benchmark price of 85% industrial grade formic acid in China was 2910 yuan/ton, an increase of 2.83% compared to the same period last week (around November 10th), a month on month increase of 3.93%, and a year-on-year increase of 4.86%.
Core factor for price increase: maintenance plan transmitted from dual production areas
A leading production enterprise in Liaocheng is about to launch a 30 day maintenance plan, and another major manufacturer in Feicheng will implement equipment maintenance at the end of this month. The dual production area maintenance will lead to a phased contraction of market supply. The market sentiment has been dominated by three expected adjustments, from “upcoming maintenance” to “synchronous maintenance in dual production areas”, and then to “delayed maintenance until later this month”. Although the current supply remains abundant, the expectation of maintenance has provided substantial support for prices.
Downstream enterprises have always maintained a rigid procurement rhythm, with stable inventory consumption and no significant increase or contraction in demand. The main application industries such as pharmaceuticals, rubber, and leather purchase on demand, with limited acceptance of price increases, which to some extent suppresses significant price fluctuations.
The formic acid data analyst from Shengyi Society believes that in the short term, the formic acid market price may continue to remain at a high level of around 2910 yuan/ton. If the maintenance is launched as scheduled in the latter half of the year, it may further exacerbate the expectation of tight supply. Specific attention still needs to be paid to the dynamics of the factory area.