Recently, the domestic formic acid market has shown a phased trend of “stabilizing first and then rising, continuously climbing”, breaking away from the previous weak pattern and completing a market reversal from weak balance to steady upward trend. The market supply and demand pattern continues to optimize, and the industry trading atmosphere continues to recover. As of July 6th, the benchmark price of industrial grade 85% formic acid in China was 2300 yuan/ton, an increase of 13.86% from the end of June.
| Gamma-PGA (gamma polyglutamic acid) |
Phase 1: Horizontal consolidation
From June 29th to 30th, the formic acid market continued its previous sluggish trend, with the mainstream average price stabilizing at 2020/ton and no significant price fluctuations. The overall market is in a weak equilibrium state, with industry mainstream expectations being bearish, and downward pressure on the previous market still exists. However, the market has shown signs of recovery, with some production companies slightly raising their prices. Coupled with the news of delayed resumption of industry equipment production, downstream purchasing attitudes have slightly improved, and the enthusiasm for purchasing has increased, driving manufacturers’ inventory to steadily decline and laying the foundation for subsequent price increases.
Phase 2: Continuous Upstream
During the continuous upward phase from July 1st to 3rd, the market opened up a three consecutive upward trend, with steady and even gains. On July 1st, the market reached a turning point with a significant increase in prices, with the average price rising to 2100 yuan/ton, a daily increase of 4%. With the continuous improvement of shipping trends and the continuous release of downstream terminal replenishment demand, coupled with the steady decline of manufacturer inventory, multiple favorable factors have formed support, driving the market to continue to strengthen. The upward trend continued in the following two days, and on July 3rd, the price rose again, with an average price of 2300 yuan/ton, a daily increase of 9.52%.
Market forecast: Price “rises”, favorable supply and demand, may continue to rise
The market analysis system shows that the formic acid curve has recently shown an upward trend, with the short-term moving average surpassing the long-term moving average, indicating an upward trend.
And the price is at a long-term low, with a large upward potential.
From a fundamental perspective, industry inventory has fallen back to the median range, with some companies limiting shipments and tightening spot supply. At the same time, downstream concentrated replenishment has driven a surge in trading heat, and the resonance of supply and demand has completely reversed the weak market pattern. The formic acid market is likely to continue its strong operating trend.
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