Formaldehyde Market - Growth, Trends, and Forecasts (2023 - 2028)

The formaldehyde market is expected to record a CAGR of greater than 5.5% globally during the forecast period (2022-2027).

Due to the COVID-19 outbreak, nationwide lockdown around the globe, disruption in construction activities and supply chains, production halts, and labor unavailability have negatively impacted the formaldehyde market. However, the healthcare segment is witnessing an improvement in the market, thus will aid the growth of the market studied.

Key Highlights

• Owing to the versatile and favorable chemical properties of formaldehyde, its application in the automotive and construction industry is growing exponentially, consequently propelling market growth.
• However, the toxic and carcinogenic nature of formaldehyde and stringent regulations employed by several authorities regarding formaldehyde emissions are likely to hinder the growth of the studied market.
• The research and technological development (RTD) related to the application of formaldehyde derivatives for the treatment of Organic Fraction of Municipal Solid Waste (OFMSW) will likely provide opportunities for the formaldehyde market over the next five years.
• Asia-Pacific region dominates the formaldehyde market, owing to the escalating formaldehyde consumption from countries such as China and India.

Key Market Trends

Construction Industry to Dominate the Market

• The construction industry is the dominating segment owing to large-scale formaldehyde consumption for construction, remodeling activity, and furniture production.
• Formaldehyde-based resins are used to create composite and engineered wood products for moldings, furniture, countertops, cabinetry, shelving, stairs, wall sheathing, support beams, flooring, and trusses, among many other household furnishings and structures.
• According to U.S. Census Bureau, the total construction output in United States is estimated to be USD 1639.86 billion in December 2021, indicating a 9% increase compared to USD 1504.2 billion in December 2020.
• In addition, residential construction has also been increasing in India, as the country is likely to witness an investment of around USD 1.3 trillion in housing over the next seven years, which will boost the market studied.
• According to Federal Statistical Office (Destatis), in Germany, the turnover in the construction industry in November 2021 was up 6.2% compared to the corresponding month of the previous year.
• With the rising construction and remodeling activities, the requirement from the formaldehyde market is projected to increase in the forecast period.

Asia-Pacific Region to Dominate the Market

• Asia-Pacific region stands to be the dominant market for the automotive and construction industry. Factors such as good adhesive strength and moisture resistance properties of formaldehyde-based resins and continuous demand from the furniture sector are likely to drive the market growth.
• Salasar Industries plans to take up a new formaldehyde manufacturing unit in Haryana, India. The project involves setting up a manufacturing unit for formaldehyde, with a capacity of 160 MT/Day. The estimated cost of the project is INR 50.2 million. As of March 2021, environment clearance for the project is underway.
• China is in experiencing massive growth in its construction sector. According to the National Bureau of Statistics of China, in 2021, the construction output in China was valued at approximately CNY 29.31 trillion.
• India is the fifth largest producer and the fourth largest consumer of furniture in the world. According to National Investment Promotion and Facilitation Agency, the total rental furniture and appliances market in India reached INR 33,500 crores during FY21.
• Furthermore, Indonesia plans to develop a USD 1 billion worth 900 MW hydropower project in Kayan River in the North Kalimantan (Kaltara) province. The project stands at the EPC stage, with a startup date planned for 2022. The project is expected to be commissioned after the completion of the construction in 2025.
• Also, the Asia-Pacific region is the largest automotive manufacturing hub, registering almost 60% production share of the world. According to OICA, in the first nine months of 2021, the total production of vehicles stood at 32.67 million units, an increase of 11% compared to the same period last year.
• Hence, all such market trends are expected to drive the region's demand for the formaldehyde market during the forecast period.

Competitive Landscape

The global formaldehyde market is fragmented in nature, with a few large-sized players and many small players. Some major companies (not in any particular order) are Perstorp Orgnr, Hexion, Georgia-Pacific Chemicals, Celanese Corporation, and Foremark Performance Chemicals.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support