The domestic formic acid market has recently shown a gradual upward trend. As of March 23, the price of 85% industrial-grade formic acid increased by 9% compared to the same period last week (March 16), up 23% month-on-month, and down 9.77% year-on-year.
Supply continues to contract
Starting March 19th, temporary shutdowns of some production facilities led to a continued contraction in the effective supply of formic acid in the market. This, coupled with the existing supply reduction trend, fueled expectations of tight supply. Furthermore, market news indicated that major formic acid producers in Shandong province, with a combined capacity of 350,000 tons, planned maintenance in March. This expectation further reinforced the supply contraction expectation. Data from March 23rd showed a decline in the operating rate of the domestic formic acid market, a continued decrease in market supply, and a sustained decline in inventory, formally establishing a tight supply-demand balance and providing strong support for a significant price increase. Simultaneously, the international market environment also indirectly impacted the domestic supply side. The conflict in the Middle East led to soaring energy and raw material costs, prompting European chemical companies such as BASF to raise formic acid prices, further shifting the global formic acid market focus upwards and providing external support for domestic manufacturers to adjust prices.
Demand performed well
Since mid-to-late March, the formic acid market has maintained strong sales, with downstream procurement following demand as needed, providing ample support for essential needs and ensuring smooth product distribution channels. This has effectively driven inventory reduction for manufacturers, giving them the confidence to raise prices. Internationally, formic acid prices surged in mid-to-late March, leading to a significant increase in domestic formic acid export demand. Emerging Southeast Asian markets, particularly Vietnam, are highly dependent on Chinese formic acid, and this increased export demand has further widened the supply-demand gap in the domestic market. The combined effect of these domestic and international positive factors has prompted domestic manufacturers to continuously raise formic acid ex-factory prices.
In mid-to-late March, the domestic formic acid market price gradually shifted from a stable consolidation to a sustained upward trend. The core logic lies in the combined effect of a continued contraction in supply and a steady improvement in demand, coupled with the driving force of rising international market prices and support from anticipated factory maintenance shutdowns, pushing the market supply and demand balance from dynamic equilibrium to tight equilibrium. Looking ahead, as some manufacturers’ maintenance plans are implemented at the end of the month, market supply will further contract. Coupled with the continued positive impact of overseas markets and the release of domestic export demand, formic acid prices still have room for further increases. However, it remains crucial to pay attention to the impact of geopolitical changes on energy and raw material costs, changes in downstream demand, and the implementation of maintenance plans.
Post time: Mar-24-2026