For the Quarter Ending September 2022
In Q3, the price of Formic Acid in the USA surged with the succeeding month. A supply/demand equilibrium disruption occurs when major enterprises cut production due to a lack of product availability. With gradual accelerating demand from the downstream preservative industry, new stock demand remains robust. Rising fuel and transportation costs affected the market for conveying cargo within the region. In September 2022, the price of Formic Acid in the USA surged to USD 1099/ton FOB Texas. Due to the limited supply and low inventories in the domestic market, market fundamentals were impacted. Domestic demand for Formic acid was reported bullish, prompted by healthy demand from the downstream preservative market.
Asia Pacific region
In Q3 of 2022, the price trend of Formic Acid showed a downward trajectory with every subsequent month, along with deterred trading dynamics and sufficient product availability. In the midst of the declining demand from the downstream additive industry, regional Formic Acid producers cut their production as accumulation pressurized them to clear their current stocks. Sentiments of Formic Acid in the region remain thin, with affected margins and sales from the end-user industries. In terms of the feedstock market, Methanol prices stabilized this week due to tepid trading dynamics and utilization of existing inventories. In India, the price of Formic Acid slipped to USD 765/ton Ex-Mumbai.
In Europe, the Formaldehyde market rose with rising feedstock Methanol prices and oscillation in the upstream Natural Gas market. In September 2022, the price of Formaldehyde in Germany surged to USD 943/tonne FOB Hamburg. With European spot power prices surging, the production cost among the significant manufacturing units increased, affecting the price trend. Limited supply with elevating upstream Methanol prices in the region helped the Formic Acid market to elevate. Tightening supply had also sent Methanol prices soaring, with high costs forcing production cuts, especially in the downstream preservative industry. Record high operating cost has been forcing industrial consumers to limit production due to the unavailability of Formic Acid and fluctuations in feedstock Methanol price.
For the Quarter Ending June 2022
In this quarter, the prices of Formic Acid dropped in May due to the surging production rate with revision in price trend for oversupplies suppliers. Feedstock Methanol prices also fluctuated on the lower end, affecting the prices of Formic acid in the regional market. However, the prices of Formic acid remained on the higher end, which caused fluctuations in the price trend. The supply/demand equilibrium improved with upcoming new capacities operating along with other plants and significant maintenance. Formic Acid prices surged compared with the previous quarter with strong market sentiments in the USA. However, acceleration in downstream demand, mainly from the preservative sector, surged the product's prices in June.
Asia Pacific region
In Q2 2022, the prices of Formic Acid slipped in June due to oversupplies of products in manufacturing units and ports of the major trading countries. During H1, the prices surged due to the limited supply of feedstock Methanol in the region with low purchasing activities of Formic Acid. However, in the second half, product inventories increased due to deterred demand in other Asian countries. With weak demand from India, Japan, and the Southeast Asian region, export from China is also affected by weak market sentiments. Ample inflows of Methanol in the region further pressurized the producers with affected margins and narrowing profit.
In Q2 2022, the price of Formic Acid slipped in the first half and revived in the final half due to fluctuations in feedstock Methanol and the downstream preservative market. Prices dropped in May due to accelerating production rates in Germany, increasing the exports to other European regions resulting in oversupplies in the region. However, in H2, supply chain woes and product shortage caused the recession trading, which caused this price hike. Import of Formic Acid in Germany from the Middle eastern market surged due to strong purchasing activities and surging interest of traders in this product. Demand from downstream preservative industries remained on a higher note, and rising interest from the industries forced the producers to meet the demand from the end-user industries.