As of H2 December, Formic Acid prices in the Asian market remained elevated. This upward trend in the Formic Acid price is primarily attributed to the continuous rise in methanol prices, a key feedstock, which has kept production costs high. Additionally, manufacturer implemented production cuts to deliberately tighten supply and create a deficit in the market. This strategic reduction in output, combined with firm feedstock costs, has provided strong price support for formic acid. Limited availability and cautious inventory management by suppliers have further reinforced the upward price momentum of the Formic Acid across the region.

In the Chinese market the price of the Formic Acid witnessed an increment as of H2 Dec. The increase in the Formic Acid price is majorly attributed to the increase in the price of the major feedstock Methanol influenced by the prolonged buildup activities from the market participants. Methanol prices have been fluctuating at elevated levels recently. In the short term, production capacity utilization and output are expected to rise, ensuring a steady domestic supply. However, foreign vessel arrivals at ports are gradually decreasing, with terminal factories remaining the primary source of incoming goods. Inventory levels are projected to continue depleting. As a result, methanol market prices are anticipated to stabilize or weaken, offering limited positive support for Formic Acid market prices.

Domestic Formic Acid plants maintained normal operations, with production levels remaining above average. Supply conditions showed no significant shortages or disruptions, limiting their impact on market prices. Meanwhile, downstream demand for Formic Acid lacked momentum, with buyers showing low purchasing enthusiasm, leading to constrained shipment activity by cargo holders.

The recent price increase in Formic Acid is directly linked to Luxi Chemical's production shutdowns and price stabilization measures. Since May, Formic Acid prices have been on a continuous decline. To counter this trend, Luxi Chemical, China’s largest formic acid producer, opted to cut production and adjust pricing strategies. Partial facility shutdowns significantly reduced on-site supply, leading to tighter market availability and an upward adjustment in Formic Acid prices.

According to ChemAnalyst's anticipation, Formic Acid prices in the Asian market are expected to exhibit bullish trends in the upcoming sessions. This outlook is primarily driven by projections of rising methanol prices, a key feedstock, which will continue to exert upward pressure on production costs. Additionally, an anticipated supply deficit, resulting from controlled production levels by manufacturers, is likely to further tighten market availability. These combined factors are expected to significantly influence Formic Acid pricing dynamics, sustaining a bullish sentiment across the region.