Strong Downstream Demand Showcasing Uptrend in Formic Acid Prices
- 26-May-2022 4:27 PM
- Journalist: Li Hua
Beijing, China- The cost of Formic acid in China flooded to USD 880/ton FOB Qingdao at the end of last week. The downstream enterprises were observed to be operating steadily after a decrease in cost pattern.
However, the costs of feedstock Methanol fell, and the cost support was limited. The costs showed an upward pattern because of healthy demand from its downstream additive ventures. Strong demand after the low market sentiments because of Labor Day had impacted the cost pattern, which rose as the market resumed.
With changes in the cost pattern, trade from China to the rest of Asia and Europe remained sluggish. Regarding inventories, they slipped with sound interest among the downstream purchasers. Logistics constraints and accelerating transportation costs further accelerated the prices.
In India, delayed deliveries of the Formic cargoes from China and surging logistics charges boost the prices at the ports. Strong downstream demand for Formic acid in India and surging energy values elevated the prices.
The production rate of Formic acid from the local market remained tepid with cautiously operated downstream ventures. Traders started to buy the product in bulk, which accounted for the price revision. Despite weaker support from upstream Methanol due to ample supply, the prices skyrocketed due to an increase in their consumption from food industries.
“The sky-high energy prices in major exporting countries like China and Germany impacted the global Formic acid along with healthy demand from downstream preservative industries. " A trusted source in China confirmed the fact.
According to ChemAnalyst, the price of Formic acid will accelerate in the forecast period with strong market sentiments. Despite oscillations in feedstock Methanol prices, the downstream market is expected to remain strong, showcasing healthy demand from the consumer’s end. Upstream Natural Gas and crude prices will likely fluctuate in the global market, affecting the Petrochemical trend.
