Reviving the Upstream Methanol Market Supports the Price of Global Formic Acid
- 09-Aug-2022 4:41 PM
- Journalist: Jacob Kutchner
Hamburg, Germany- Due to healthy demand and strong European market sentiments, strong exports from Belgium to other European regions resulted in an elevated price trend. The tightened supply of Methanol with accelerating production costs among the enterprises pressurized the producers to keep up with demand from the downstream ventures.
Rising inflation seems to risk the Methanol derivative market with accelerating prices of Petrochemicals across the region. Regional energy security concerns, dwindling production metrics and triple-digit oil prices have kept the Formic acid market uptrend. However, slipping Natural Gas prices towards the end of the week had capped the downstream product prices from further surging.
With the week ending on 5th August, the price of Formic acid in Germany surged to USD 928/ton CFR Hamburg with a weekly inclination of 1.97%.
Fanavaran Petrochemical Company and Middle East Kimiaye Pars Co. methanol plants in Iran undergo a turnaround towards the end of July, disrupting demand/supply fundamentals affecting the price of Formic Acid in Saudi Arabia.
In India, Formic Acid prices stabilized and stopped dropping further amid tepid purchasing and surging demand for new stocks. Formic acid prices are still on the lower end, and production cut among the manufacturing units due to limited market gives the producers hope to manage their existing inventories.
However, spot trading activities in India have picked up pace as buyers looked for August and early September cargoes. Freight charges from China to India are significantly high, and weak regional demand reduces trading activities.
According to ChemAnalyst, the global Formic Acid price will increase with the utilization of existing inventories and healthy demand for new stock. The feedstock Methanol market has picked up, and accelerating prices due to emerging needs in the Asian and European regions will boost the price. In addition, Formic Acid port inventory will decrease, and some coal-based methanol plants will cut production, supporting Formic Acid price.