China's Influence on the Global Formic Acid Price Index in 2026

Formic acid was trading at approximately USD 340–360/MT ex-works China and USD 360–380/MT CFR India in Q1 2026, per IMARC Group and Intratec pricing data. China's domestic ex-works price sets the global floor, with Northeast Asia the world's most competitive benchmark at approximately USD 360/kg on a delivered basis in February 2026. The base case for 2026 is modest upward drift of 5–10%, driven by rising methanol feedstock costs and recovering downstream demand — but the ceiling remains capped by China's structural overcapacity.

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Benchmark Hub	Approx. Price (Q1 2026)	Trend vs. Q3 2025	Source
Ex-works China (85%)	USD 340–360/MT	-8% YoY	Intratec / SunSirs
CFR India (85%)	USD 360–380/MT	-1.4% MoM (Feb)	IMARC Group
CFR Netherlands (spot)	USD 690–760/MT	-7.3% MoM (Feb)	IMARC Group / Intratec
US Spot (FOB)	USD 800–840/MT	+4% MoM (Feb)	IMARC Group
CIF Brazil	USD 430–460/MT	Range-bound	Intratec

Prices are approximate ranges. February 2026 data per IMARC Group; December 2025 European data per Chemanalyst.

 

Formic Acid Prices in 2026: Where the Market Stands Today

Formic acid entered 2026 in a structurally weak position, primarily because China's domestic market did not recover as expected through the second half of 2025. The SunSirs benchmark price for 85% formic acid in China stood at approximately CNY 2,400/MT in July 2025, described at the time as a low level within the year. By Q1 2026, prices remain depressed in real terms compared to the 2022–2023 period, when China domestic formic acid traded as high as CNY 3,900–4,200/MT on input cost spikes and post-COVID restocking demand.

The year-on-year decline tells the structural story. China's average formic acid price fell from approximately USD 396/MT in mid-2024 to USD 340/MT by mid-2025, a drop of around 14%, per Intratec pricing data. In the same period, the US market declined 18% year-on-year and Europe moved from the low USD 700s to USD 690–760/MT CFR Netherlands. Oversupply originating from China is the primary mechanism compressing prices in every downstream market.

Market sentiment in early 2026 is cautious-to-neutral. Supply is balanced to long, particularly in Northeast Asia. Downstream demand from leather, textile, and rubber sectors is recovering slowly — but not at a pace that will absorb China's export volumes without continued price discounting. The key question for buyers in 2026 is not whether China influences the global formic acid price; it manifestly does. The question is whether China's domestic demand recovery and methanol cost pressures will begin to firm the export floor before structural overcapacity reasserts a ceiling.

 

What Does It Cost to Make Formic Acid? China's Cost Structure and the Methanol Problem

Methanol: Approximately 55–65% of Chinese Production Cost

Formic acid is synthesized via carbonylation of methanol — methanol reacts with carbon monoxide in the presence of a sodium methoxide catalyst to produce sodium formate, which is then acidified to yield formic acid. This means methanol is not simply an input; it is the molecular feedstock from which formic acid is chemically derived. Chinese producers source methanol domestically, where China's coal-to-methanol route gives them a structurally lower feedstock cost than European or North American producers reliant on natural gas.

In mid-2025, methanol increased approximately 3.17% month-on-month, per Chemanalyst data tracking the US market, with China's domestic coal-based methanol prices moving separately but directionally similar. The coal-to-methanol cost structure insulates Chinese producers from TTF or Henry Hub gas spikes — the disruption that significantly repriced European formic acid in 2021–2022 when energy costs surged. As long as China's domestic coal remains accessible and policy-supported, Chinese formic acid producers retain a structural cost advantage of approximately USD 150–220/MT over European peers operating on natural gas.

Energy and Environmental Compliance: A Rising Cost Floor

China's "dual control" policy on energy consumption, which targets both total energy use and energy intensity per unit of GDP, has progressively increased compliance costs for energy-intensive chemical producers. Formic acid manufacturing is moderately energy-intensive, with electricity and steam accounting for approximately 20–30% of production cost. Producers in Shandong and Jiangsu provinces — where the majority of Chinese formic acid capacity is located — have faced incremental cost increases from environmental audits, equipment upgrades, and carbon accounting requirements introduced under the 14th Five-Year Plan.

This regulatory pressure creates an important dynamic: it raises the true cash cost floor for Chinese production, even as abundant capacity keeps market prices low. Producers running at low utilization on thin margins cannot indefinitely absorb compliance costs. Several smaller plants in China have already curtailed or exited the market, providing partial relief to the oversupply — but the scale of remaining capacity from Luxi Chemical Group, Shandong Baoyuan Chemical, and Feicheng Acid Chemicals keeps the market long.

Feedstock-to-Price Pass-Through: Approximately 4–8 Weeks

When methanol prices move, formic acid export quotations from Chinese producers adjust with a typical lag of four to eight weeks. This reflects the time between feedstock procurement and finished goods inventory clearing. For buyers with quarterly contract reviews, this lag creates windows where spot prices can move ahead of or behind the contract index. In a rising methanol environment — the 2026 base case — buyers on index-linked quarterly contracts should expect to see price increases reflected in May–June 2026 re-pricing cycles if methanol costs firm in Q1.

 

Is the Global Formic Acid Market Tight, Balanced, or Oversupplied?

The market is balanced to long in early 2026, with the oversupply bias more pronounced in Asia-Pacific than in Europe or North America.

China exported approximately 22,000 tonnes of formic acid in June 2025 alone, per China General Administration of Customs data. Over the course of 2024, China's monthly export volumes averaged in the same range — positioning China's annual formic acid export book at approximately 250,000–280,000 MT/year. Against a global demand base of approximately 1.10–1.14 million tonnes (2025–2026, per Mordor Intelligence), China's exports represent roughly 22–25% of total global supply reaching non-Chinese buyers. The concentration is higher in India, Southeast Asia, and Brazil, where Chinese material represents 50–80% of import volumes.

Capacity expansion is the other side of the surplus equation. Luxi Chemical Group alone has proposed to expand to approximately 400,000 MT/year of formic acid capacity — which, if realized, would represent approximately 30% of global capacity in a single company. Chinese producers including Jiangsu SOPO Chemical and Shandong Acid Technology have also signaled capacity investment plans, per Technavio market tracking. This trajectory of capacity additions continuing to outpace demand growth is the structural reason formic acid prices have trended lower since 2023 and why a sustained price recovery requires either a significant demand catalyst or capacity discipline that China's chemical industry rarely delivers voluntarily.

On the demand side, the animal feed and silage additive sector accounts for approximately 37% of global formic acid consumption, per Mordor Intelligence. This application drives seasonal demand patterns in Q1 and Q3 as farmers purchase feed preservation chemicals aligned with growing and harvest cycles. Pharmaceutical output in China — a growing secondary demand driver — grew approximately 10.2% in Q1 2025, per China National Bureau of Statistics, supporting higher domestic consumption of formic acid as a chemical intermediate. Leather, rubber, and textile finishing together account for the remaining demand, with leather particularly important for Southeast Asian buyers.

The net balance assessment: supply is structurally long in 2026, but not dramatically so. The ~10% Northeast Asia price drop in February 2026 (per IMARC Group) reflects ample stocks and steady methanol costs suppressing urgency to buy. A demand recovery in Q2–Q3 2026 aligned with peak agricultural and leather tanning seasons should partially absorb the overhang.

 

Formic Acid Prices by Region: China's Export Floor and the Global Spread

The most important feature of the global formic acid pricing map is the spread between Chinese ex-works prices and delivered prices in consuming markets. This spread is not arbitrary — it reflects freight, insurance, import duties, and quality adjustments for the 85% vs. 90% concentration grades that dominate trade.

In February 2026, the Northeast Asia benchmark sat at approximately USD 360/kg (USD 360/MT), while Europe (CFR Netherlands) traded at USD 760/MT and the US at USD 820/MT, per IMARC Group data. The USD 400–460/MT differential between Chinese export quotes and European delivered prices reflects a combination of ocean freight, import tariff exposure, and the price premium commanded by European-origin supply from BASF (Ludwigshafen) and Perstorp (operating in Sweden), which retains market preference for high-specification pharmaceutical and food-grade applications.

India is the world's largest single-country importer of formic acid from China and serves as the most transparent indicator of Chinese export pricing pressure. India's formic acid index tracks the China CFR India price closely, easing approximately 1.4% month-on-month in February 2026 to approximately USD 720/MT (at the USD 0.72/kg benchmark), per IMARC Group. India has limited domestic formic acid production capacity — GNFC (Gujarat Narmada Valley Fertilizers and Chemicals) and Rashtriya Chemicals and Fertilizers (RCF) are the primary domestic producers, but together they cannot cover India's demand, making India a price-taker from Chinese exports.

Brazil represents a strategically important but price-insulated market. CIF Brazil formic acid was range-bound at approximately USD 430–460/MT in late 2025, per Intratec data, reflecting longer shipping routes and Brazilian import duty structures that create a floor below which Chinese material cannot be profitably landed. This makes Brazil one of the less volatile reference points in the global index.

Region	Primary Import Origin	Grade Preference	Duty Environment	China Price Sensitivity
India	China (dominant)	85%	No formal ADD on formic acid	Very High
Southeast Asia (Vietnam, Thailand)	China	85–90%	RCEP reducing duty layering	High
Europe	China + BASF/Perstorp	90%+	Monitoring under EU ADD framework	Moderate
North America	China + Domestic	85–90%	US tariff regime applies	Moderate
Brazil	China	85%	Import duty floor	Low–Moderate

 

China's Structural Role as Global Price-Setter: The Mechanisms

China is not simply a large producer of formic acid. It is the marginal price-setter for the global market. Three mechanisms operate simultaneously.

First, Chinese ex-works prices define the export floor. When Chinese producers' domestic prices fall — as they did through 2024–2025 amid weak domestic demand — their willingness to offer aggressively priced export quotations increases. The June 2025 export volume of 22,000 MT in a single month was partly supported by "good export orders from a leading enterprise," per SunSirs, at a time when domestic demand was described as "weak with no obvious sign of recovery." Chinese producers use exports as a demand release valve, which exports price pressure directly to consuming markets globally.

Second, China's coal-to-methanol cost structure sets the global marginal production cost floor. European producers at BASF Ludwigshafen and Perstorp operate on natural gas-derived methanol, making them structurally higher-cost. When Chinese producers can land material at CFR Netherlands around USD 690–760/MT and European cash costs approach or exceed that level, European producers face margin compression and reduced market access in commodity-grade applications. BASF's decision to list its low-carbon-footprint formic acid on its eAuction platform in China in June 2025 signals a strategic pivot toward differentiation rather than cost competition.

Third, China's regulatory environment introduces periodic supply shocks that can sharpen upward price moves. The "dual control" energy policy has caused temporary production curtailments at smaller Chinese facilities during periods of electricity rationing — most pronounced in Q3 2021, when Shandong province experienced industrial power cuts. If China's carbon market expands further to include broader chemical production (planned for 2027), the compliance cost uplift could meaningfully raise China's effective export floor price, compressing the spread between Chinese and European pricing.

 

Formic Acid Price Forecast 2026: Base Case, Upside, and Downside

Base Case: Modest Firming to USD 370–400/MT ex-Works China by Q3 2026

The most probable scenario for 2026 is a gradual recovery in Chinese ex-works prices from the Q1 2026 level of approximately USD 340–360/MT toward USD 370–400/MT by Q3 2026. The primary drivers are: (1) seasonal demand recovery in animal feed and leather tanning from Q2 onward; (2) modest methanol cost increases as global gas markets tighten seasonally; and (3) the natural inventory correction as channel stocks built up in late 2025 are drawn down. This represents a recovery of approximately 8–12%, still well below the 2022–2023 cycle highs.

Key milestones to watch: China's Q2 2026 export customs data (due approximately August–September); BASF's next formic acid price adjustment announcement for North America; and methanol price direction on the Zhengzhou Commodity Exchange, which provides the most real-time signal of Chinese feedstock costs.

Upside Risk: Chinese Capacity Curtailment or Export Policy Change

A curtailment of Chinese production capacity — whether driven by enforced environmental compliance shutdowns, electricity rationing during a summer heat event, or a deliberate policy to support domestic producers — could tighten the global supply balance faster than expected. A 15–20% reduction in Chinese export availability (equivalent to pulling back 35,000–50,000 MT/year from global trade) could push ex-works China prices toward USD 420–450/MT within 60–90 days of the curtailment announcement, and CFR India toward USD 480–520/MT. This scenario has historical precedent from the 2021 Shandong power rationing event, which spiked multiple Chinese chemical markets within weeks.

Additionally, any expansion of China's chemical export tax policy — which has recently affected products like BDO (effective April 2026, cancellation of VAT export tax rebate) — to formic acid would immediately increase the effective cost of Chinese export supply. Buyers in India and Southeast Asia should monitor MOFCOM announcements closely through H1 2026.

Downside Risk: New Capacity Additions and Prolonged Domestic Weakness

If Luxi Chemical's expanded capacity (targeting 400,000 MT/year) begins commercial operations ahead of schedule and simultaneously Chinese domestic demand from the leather, textile, and agricultural sectors continues to underperform, the export volume surge could overwhelm import markets and push CFR India below USD 330–350/MT — the practical floor implied by Chinese cash costs plus minimum logistics margins. Jiangsu SOPO Chemical's disclosed expansion plans add further supply-side risk to H2 2026 if commissioning timelines compress.

The downside scenario is reinforced by the structural trend in Chinese overcapacity. Asia's surplus chemicals capacity reached approximately 226 million tonnes by year-end 2025 across product categories, per ResourceWise, and formic acid is part of that broad structural picture. Buyers who lock in large fixed-price term contracts at current levels risk overpaying if a new wave of Chinese exports arrives in H2 2026.

Scenario	Ex-Works China Price	CFR India	Primary Trigger	Timeline
Base Case	USD 370–400/MT	USD 390–420/MT	Seasonal demand + methanol firming	Q2–Q3 2026
Upside	USD 420–460/MT	USD 480–520/MT	Chinese curtailment or export policy change	60–90 days after trigger
Downside	USD 300–330/MT	USD 330–360/MT	Luxi expansion + domestic demand weakness	H2 2026 onward

 

How to Time Your Formic Acid Procurement in 2026

Current Recommendation: Partial Coverage at Spot; Avoid Long Fixed-Price Commitments

The current market balance — long supply, weak domestic Chinese demand, and flat-to-slowly rising methanol costs — does not justify aggressive forward buying at fixed prices. Buyers in India and Southeast Asia should target 50–60% of H1 2026 requirements on term contracts with quarterly price reviews, and cover the remaining 40–50% on spot or index-linked terms. This structure captures supply security without locking in full exposure to what could be a still-declining or sideways price environment in Q1 2026.

Contract vs. Spot Decision in This Market

For buyers taking 500 MT/month or more (the typical minimum for term contract structures from Chinese producers), index-linked quarterly pricing referencing the China domestic ex-works benchmark or the CFR India assessment from IMARC Group or Chemanalyst is preferable to fixed-price annual contracts in the current environment. Fixed-price contracts negotiated at Q4 2025 levels (approximately USD 350–365/MT ex-works China) would have been appropriate in a rising-cost environment; in a flat-to-slightly-recovering market, they create the risk of overpaying relative to spot in Q3–Q4 2026 if the downside scenario (Luxi expansion) materializes.

Seasonal Timing Guidance

Formic acid demand in Asia follows two identifiable peaks: Q1 (restocking for spring agricultural season, particularly silage and feed preservation) and Q3 (leather tanning season in South and Southeast Asia, aligning with pre-monsoon and post-monsoon production cycles). Buyers who cover Q1 requirements in November–December of the prior year have historically captured low-cost windows before the pre-season restocking runs. For Q3 2026 volumes, the optimal procurement window is May–June 2026, before peak leather tanning demand in July–August pushes up CFR prices in Vietnam, Thailand, and India.

If You Must Buy Spot Now

Buyers covering Q2 2026 requirements through spot purchasing in April–May 2026 should benchmark CFR India at approximately USD 360–390/MT as a reasonable entry range. Avoiding spot purchases in August–September 2026 is prudent unless methanol stays flat — the seasonal demand combination of feed preservation and leather tanning will tighten the supply-demand balance in that window more than the base case suggests.

 

Procurement Risk Management: Dual Sourcing and Force Majeure Clauses

The concentration risk in Chinese formic acid supply is the most underappreciated risk for buyers in Asia and Europe. India, Vietnam, Indonesia, and Thailand collectively import the majority of their formic acid requirements from China, creating a single-origin dependency that becomes acutely visible whenever Chinese regulatory action, logistics disruptions, or production curtailments occur. The 2021 Shandong power rationing event and the 2024 post-pandemic logistics bottlenecks both demonstrated how quickly CFR spreads widen when Chinese export availability tightens — even temporarily.

Buyers importing more than 200 MT/month should maintain at least one non-Chinese alternative supply source. BASF's supply out of Ludwigshafen remains accessible for European and Middle Eastern buyers at a price premium of approximately USD 100–150/MT above Chinese CFR levels; Perstorp's bio-based formic acid offers an additional differentiated option for buyers requiring sustainability documentation. For buyers in India, GNFC and RCF represent limited but available domestic alternatives worth maintaining as emergency supply relationships, even at domestic Indian pricing that may exceed Chinese CFR levels.

Force majeure and price re-opener clauses are particularly important in Chinese supply contracts given the history of export policy volatility. Any term contract for H2 2026 volumes should include a price re-opener trigger tied to a China domestic methanol price movement of more than 15% within a 30-day window, and a force majeure clause explicitly covering Chinese regulatory or export control actions.

 

Frequently Asked Questions

What is formic acid currently trading at in 2026?

Formic acid was trading at approximately USD 340–360/MT ex-works China and USD 360–380/MT CFR India in Q1 2026, per IMARC Group and Intratec pricing data. European delivered prices (CFR Netherlands) ranged from USD 690–760/MT in February 2026, reflecting the premium for non-Chinese-origin supply and shorter logistics chains serving pharmaceutical and specialty applications.

What are the main factors driving formic acid prices in 2026?

Three factors dominate. First, Chinese production capacity and export volumes — China is the world's largest producer and its ex-works prices set the global floor. Second, methanol feedstock costs, because formic acid is synthesized via methanol carbonylation and methanol accounts for approximately 55–65% of Chinese production cost. Third, China's "dual control" environmental policy and energy cost regime, which raises the compliance cost floor for Chinese producers even as overcapacity suppresses market prices.

Is formic acid price going up or down in 2026?

The base case is modest upward drift of 8–12% from Q1 2026 lows, primarily driven by seasonal demand recovery in animal feed and leather tanning and gradual methanol cost firming. The primary downside risk is new Chinese capacity from Luxi Chemical and Jiangsu SOPO entering the market faster than demand absorbs it, which could push ex-works China back toward USD 300–330/MT in H2 2026.

What is the best time of year to buy formic acid?

For buyers in Asia, November–December represents the historically softer procurement window ahead of Q1 agricultural restocking demand. For Q3 volumes (peak leather tanning season), locking in during May–June captures supply before the summer demand surge tightens the Southeast Asia and India CFR markets. Avoid spot buying in August–September, when seasonal demand peaks and Chinese producer export availability tightens.

Should I buy formic acid on a term contract or spot in 2026?

For volumes above 200 MT/month, a quarterly index-linked term contract referencing the China ex-works or CFR India benchmark is the preferred structure in 2026. The market is not tight enough to justify the premium of fixed-price annual contracts, and the downside risk of Chinese capacity additions makes full-year fixed-price exposure unwise for buyers without ability to renegotiate. Spot purchasing should cover the remaining 40–50% of requirements, timed to seasonal procurement windows.

How does methanol price affect formic acid prices?

Methanol accounts for approximately 55–65% of Chinese formic acid production cost. When domestic Chinese methanol prices rise — tracked through the Zhengzhou Commodity Exchange and CNY-denominated spot assessments — formic acid export quotations from Chinese producers adjust with a lag of approximately 4–8 weeks. A 10% increase in Chinese methanol costs typically translates to a USD 20–30/MT increase in formic acid ex-works pricing, assuming producers can pass through costs in a balanced market. In an oversupplied market, the pass-through may be partial, compressing producer margins rather than fully reaching buyers.