Asian Formic Acid Prices Witness a Steep Rise with Recovering Demand

Shanghai, China- After New Year’s Eve, the Chinese Formic Acid manufacturers, including LUXI Chemicals, increased the Formic Acid price because of firmer bidding for January and strong market sentiments.

Despite weak feedstock Methanol prices in the past few weeks, the Formic Acid market has followed a steady price trend due to tepid demand from the downstream preservative and textile industries.

In the current scenario, there are many plants in China, including the factory industrial area which is under lockdown. In addition, many customs, banks, and transportation restrictions impacted the bulk trading of shipments in the domestic market. For overseas suppliers, shipments are delayed up to 1-2 months, disrupting supply/demand fundamentals.

Turnarounds at the local production units took place due to the Covid outbreak, which hampered the production activities in some parts of China, capping the prices to decline further.

In Turkey, the price of Formic Acid is still on the higher end with healthy market fundamentals. Rising product demand in the region with healthy imports from Germany and China affected the price trend. As a result, producers purchase the product in bulk and expect the prices to increase further. However, constraints in supply and strong market sentiments remain the major factors responsible for the price hike.

However, Indian Formic Acid suppliers are increasing their product prices. Exports from China to the Indian ports are also surging gradually with the revision in the price trend. Indian manufacturers also taken followed up on the price trend after the price increase in China. Gujarat Narmada Valley Fertilizers & Chemicals Limited (GNFC), a major Formic Acid producer in India, is trying to cope with the Indian demand and operating its plants as per the requirement of the end user preservative and textile industries.

According to ChemAnalyst, the price of Formic Acid in the Asian market will increase in the forthcoming weeks. In China, with growing Covid cases after the easing of the zero-Covid policy, trading activities can alter the market dynamics, resulting in higher Formic Acid prices. Continuous tight supply and recovering post-holiday Lunar New Year demand further fuel the prices. In Turkey, Higher inflation and depreciating currency values make import prices more competitive for the region.