Published September 2015
Formaldehyde is the most commercially important aldehyde. Urea-, phenol-, and melamine-formaldehyde resins (UF, PF, and MF resins) account for approximately 70% of world demand for formaldehyde in 2015; other large applications include polyacetal resins, pentaerythritol, methylenebis(4-phenyl isocyanate) (MDI), 1,4-butanediol (BDO), and hexamethylenetetramine (HMTA). Most formaldehyde producers are concerned primarily with satisfying captive requirements for derivatives and/or supplying local merchant sales. Formaldehyde is usually produced close to the point of consumption since it is fairly easy to make, is costly to transport, and can develop problems associated with stability during transport. As a result, world trade in formaldehyde is minimal.
World consumption of 37% formaldehyde is forecast to grow at an average annual rate of about 4% from 2015 to 2020. Growth during 2006–09 was marginal, largely as a result of the global recession. Northeast Asia, especially China, continues to add capacity for formaldehyde, reigning as the largest producer globally. Between 2010 and 2015, world capacity for 37% formaldehyde grew at an average annual rate of about 3%, slightly behind world consumption, which grew at an average annual rate of 4.4% during the same period.
The following pie chart shows world consumption of formaldehyde:
Construction/remodeling activity, vehicle and furniture production, and original equipment manufacture (OEM) account for most world consumption of formaldehyde. Demand for these markets is greatly influenced by general economic conditions. As a result, demand for formaldehyde largely follows the patterns of the leading world economies. Formaldehyde resins are used in the wood products industry predominantly as adhesives. Growth of these resins is strongly correlated to construction/remodeling activity (which accounts for over 50% of consumption), and to a lesser degree, the automotive industry.
Concerns over possible human carcinogenicity from exposure to formaldehyde have been a controversial issue. Numerous studies assessing the human risk of low-level exposure to formaldehyde have been conducted; interpretation of study findings has been varied. The lack of conclusive evidence has led to widespread disagreement among industry, government agencies, and unions regarding the appropriate risk assessment for formaldehyde.
Continuing significant-to-rapid demand growth in Asia, mainly China, for most applications will balance moderate growth in North America, Western Europe, Africa, and other countries.
China is the single-largest market for formaldehyde, accounting for 42% of world demand in 2015; other countries with large markets include the United States, Germany, the Netherlands, Spain, Italy, Belgium, Poland, Russia, India, South Korea, Japan, Brazil, and Canada. China is forecast to experience high growth rates and significant volume increases in demand for 37% formaldehyde during 2015–20. Demand for 37% formaldehyde in the United States is forecast to grow moderately, mainly driven by UF resins, PF resins, and MDI. Central Europe, the Middle East, the Indian Subcontinent, and South America are also expected to show large volume increases as a result of increased production of wood panels, laminates, MDI, and pentaerythritol, and the start-up of polyacetal resin production in the Middle East.
Increasing production of wood-based panels and laminates for both domestic use and exports is largely the driving factor for increased demand, in addition to strong demand for chemical derivatives in markets such as China and Other Asia (excluding Japan). Overall economic performance will continue to be the best indicator of future demand for formaldehyde.