Strengthening demand and insufficient supply supported the cost of Formic Acid this week. The sentiments were strong in the upstream market, which drove the prices. In China, the domestic industrial grade 85% Formic acid market surged to USD 976 when observed on 23rd March. The prices surged by 25.68% when compared with 18th March. The upstream liquid Ammonia market rose, and Methanol companies’ Ex-factory quotations in Shandong have surged. The Russia-Ukraine conflict also impacted the Indian Petrochemical industries, where the surging fertilizer industry increased Feedstock Sulphur prices, which boosted the price of Formic Acid in the regional market.

In Europe, the feedstock Ammonia market surged as disruption of supplies from Russia impacted the price of Formic acid. Increasing sanctions on Russia also created barriers to petrochemicals trading, resulting in a supply shortage. Along with that, soaring crude oil prices affected the Petrochemical industries and dented the Formic Acid producer’s margin. The export of Formic acid from Germany to other European regions were increased with increasing transportation costs within the European region. The demand for Formic acid in downstream preservative industries is also growing with surging health awareness, accelerating the growth of the Natural food preservatives market across the globe.

According to ChemAnalyst, the price of Formic acid will increase in the upcoming weeks with surging feedstock Sulphur and Ammonia prices. Robust demand and insufficient supply will pressurize the significant players to meet the requirement from the consumer’s end. It is also expected that producers of Formic acid will increase the price for the global market due to rising raw material costs and strong market sentiments. High energy values, supply constraints, and squeezing profits from the end-user industries will keep the product’s market high. Export of Formic Acid from China to India and other Asian countries will increase, driving the market.