The domestic formic acid market as a whole has shown a continuous sideways consolidation trend, with stable prices and no significant fluctuations. The market supply and demand are in a weak balance state. As of May 11th, the benchmark price of 85% industrial grade formic acid in China was 2400 yuan/ton, a decrease of 20% month on month and 14.29% year-on-year.
At this stage, the price of formic acid remains stable, but the inherent supply-demand contradiction in the market has gradually emerged. The main influencing factors are concentrated in three aspects: supply, inventory, and downstream demand
On the supply side, overall stability has been maintained, with no significant reduction in production capacity. The market supply is sufficient, providing basic support for price stability, and there has been no price action caused by supply shortages.
At the inventory level, due to the concentrated shipment of low-priced orders before the May Day holiday, some manufacturers have experienced a decrease in inventory during the holiday period compared to the previous period, which has to some extent alleviated inventory pressure. However, from the overall industry perspective, inventory is still in the upper middle range and has not formed a situation of inventory shortage, which has limited support for prices.
The demand side is the core weakness of the current market, and downstream manufacturers generally hold a bearish attitude, with low purchasing willingness. They mainly purchase for essential needs and replenish a small amount of inventory, without centralized stocking behavior, resulting in insufficient market transaction activity. Due to the lack of favorable market support during this stage, effective demand pull cannot be formed, resulting in the overall market being in a weak equilibrium state, making it difficult to promote price increases.
Outlook for the future: Short term stability is difficult to change, and downside risks still exist