European and Asian Formic Acid Market Dwindles Under Gloomy Demand Dynamics
European and Asian Formic Acid Market Dwindles Under Gloomy Demand Dynamics

European and Asian Formic Acid Market Dwindles Under Gloomy Demand Dynamics

  • 05-May-2023 3:39 PM
  • Journalist: Nicholas Seifield

Hamburg, Germany- The Formic Acid market tumbled due to lackluster demand and high product inventory levels in the European region. Supported by the deteriorating feedstock Methanol market, the production cost of Formic Acid declined, and manufacturers revised their offers on the lower end to clear their existing stocks. Rising supply and feeble demand keep the Formic Acid market under pressure with the weak offering from the downstream preservative enterprises.

In the Netherlands, Formic Acid import prices stay on a downtrend ahead of weak purchasing activities as an ample supply situation and weakening demand persist. European buyers did not accept the deals at elevated prices and were buying the cargoes on a need-to basis. After importing goods earlier than usual from Germany, retailers had an inventory surplus, which affected market fundamentals. Profit margins and revenue of significant producers drop due to lower netbacks, declining production costs, and weak demand.

This week, Formic Acid prices in China remain flat as major manufacturing units operated their plant at higher levels with a deterred downstream procurement market. The spread between feedstock Methanol and final product Formic Acid further shrinks, narrowing the profit margin and revenue among the significant producing units. In terms of the feedstock market, trade volumes in Methanol derivative markets were relatively high, and the trading participation was bearish. There was weak consumer support for Formic Acid, which kept prices low.

According to ChemAnalyst, the Formic Acid prices in the European region will remain weak with low trade flows from Germany to other European regions. In terms of the feedstock market, recession worries and low purchasing activities will adversely affect the Methanol price trend. The supply/demand fundamentals continue to be disrupted by a readily available supply of Formic Acid and limited refinery demand for it. However, in the Asian market, it is anticipated that market fundamentals will improve with gradual growth in spot purchasing activities along with high trade volumes from China to other Asian regions.

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