Recently, the domestic market for 85% industrial grade formic acid has maintained a weak and volatile downward trend. As of June 22, the benchmark price of 85% industrial grade formic acid in Shengyi Society was 2080 yuan/ton, a decrease of 5.45% compared to last week.
Market fundamentals: weak supply and demand sides, no positive support
Demand side: Traditional off-season consumption, weak follow-up on essential needs
At present, the downstream of formic acid has entered the traditional consumption off-season, and the operating rates of mainstream downstream application industries such as leather, medicine, pesticides, rubber, etc. have generally remained low. The finished product inventory of downstream factories is high, and the procurement mode is mainly based on small orders for urgent needs replenishment. The willingness to stock up in large quantities is extremely low. Even if the upstream shipment situation shows a slight month on month improvement after the price drop, it is only sporadic replenishment stimulated by low prices, and it is not a true rebound in terminal demand, which cannot fundamentally improve the weak market pattern. The weak demand side continues to suppress the upward space of formic acid prices.
Supply side: High inventory levels combined with delayed maintenance, resulting in high market supply pressure
On the one hand, at present, the overall inventory of the domestic formic acid industry remains above the median level. Under the normal operation of the equipment in the early stage, the supply of goods continues to accumulate, and the speed of inventory turnover from manufacturers is slow. The supply of spot goods is sufficient, and there is no confidence in upstream prices; On the other hand, the expected equipment maintenance and resumption plan in the industry is likely to be delayed, and the expectation of reduced market supply is dashed, further increasing the pressure on on-site spot supply.
Market forecast: formic acid prices still have downward potential
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