Feeble Demand Slows Formic Acid Price in the Asian Market

Mumbai, India- With sufficient supply and a deteriorating upstream Methanol market, the prices of Formic Acid in China slipped to USD 895/ton FOB Qingdao and USD 835/ton Ex-Shandong with a week-on-week declination of 0.77% and 1.99%, respectively, during 17th June.

On the supply side, product inventories increased due to deterred demand in other Asian countries. With weak demand from India, Japan, and the Southeast Asian region, exports from China are also affected by weak market sentiments.

Ample inflows of Methanol in the region further pressurized the producers with affected margins and narrowing profits. Downstream preservative industries are heard to operate moderately with cautiously operating downstream ventures. Regarding upstream values, oversupplies of Naphtha at the time of weak demand had impacted the product’s Asian margins.

With the week ending on 17th June, the price of Formic Acid in India slipped to USD 1014/ton CFR JNPT with a week-on-week declination of 1.3%.

The fall was due to sluggish regional demand trends and oversupplies of products at ports from China. With reducing Natural Gas values in the international market, the local producers of Formic Acid have also revised their prices. Weak market sentiments on sufficient product availability resulted in such a price trend.

It was also heard that India aims to cut taxes and duties to ease oil price pain and introduce new crude deals, which will further slow the prices of Petrochemicals in the region. As crude prices slump, the margins of major downstream companies are expected to tumble in line with the broader market amid recession fears and a weak demand outlook.

According to ChemAnalyst, the demand for Formic Acid is expected to remain affected by sufficient supply and low purchasing activities among the downstream ventures. Upstream Methanol prices will likely drop in the Asian region due to a sufficient supply of cargoes from Iran and Saudi Arabia, oscillating prices.