Slump Demand Declines the Global Formic Acid Prices

Hamburg, Germany-In addition to subdued demand, there was ample supply in Europe, which added to the downward trend for Formic Acid prices. Formic acid exports from Germany to other European and Asian markets have fallen with weak market fundamentals and limited trade volume due to oversupplies. Weak market fundamentals and lower bidding for fresh stock had hampered the Formic Acid price dynamics for the European market.

With the week ending on 18th November 2022, the price of Formic Acid in Germany slumped to USD 925/tonne FOB Hamburg with a weekly decline of 1.90%. The European Formic Acid market was adversely affected by weak feedstock Methanol demand and deteriorating trading fundamentals. Inventory levels among downstream preservative companies increased, which pushed producers to clear stock levels. Petrochemical prices have declined since the Russia-Ukraine war, and rising interest rates and high inflation are weighing on economic growth and industrial production. European producers' profit margins are particularly affected as their production costs have declined with sufficient product availability and weak trading fundamentals.

In the USA, the price trend followed the same trajectory as the European market in the wake of affected trading from the region to the South American region, namely, Brazil and Argentina. We also see that some units from Formic Acid are cutting production, as the demand reduction impacts the operating rates. The demand for Formic Acid from the downstream preservative industry was hampered, and subdued bidding from the suppliers forced the producers to reduce their prices for the regional market.

According to ChemAnalyst, the price of Formic Acid in the global market will decline due to weak demand and slow market offtakes. In the European market, deterred demand for the downstream preservative industry weakened. Export from Germany and China to the global market is expected to decline further with a revision in the prices for overseas suppliers. Declining freight costs and sufficient container availability will further ease trading cargoes.