The global formaldehyde market is predicted to augment at a significant CAGR over the forecast period, the estimated value for 2019 is accounted to be USD21.095 billion.
formaldehyde is quite simple, and naturally-occurring chemical that is composed of hydrogen, oxygen, and carbon. Its chemical formula is CH2O or HCHO. The chemical holds importance in being one of the most versatile substance for the production of varied goods. With important applications in construction and automotive industries. The growing construction industry with varied commercial and residential projects is fueling the market demand during the forecast period. However, the current novel coronavirus pandemic crisis has put a hard hit on the global chemical sector along with the shut-down of varied construction activities worldwide. This has impacted the market growth in 2020. However, with the recovery in the end-use industries, the market is predicted to propel till the end of the forecast period. Based on geography, the market is segmented as North America, South America, Europe, Middle East and Africa, and the Asia Pacific region. The Asia Pacific region is projected to hold a significant market share followed by the European region in the forecast period.
The formaldehyde is known to have an excellent adhesive and binding properties; hence, it is widely utilized for making resins. These resins are then used for the production of wood products that are used for making furniture.
Other applications of formaldehyde include, preservation of tissue specimen in biology labs, also they are helpful in preserving the shape of the specimen; it is also utilized for the production of sanitary paper products like paper towel and tissues, and it is also utilized in the development of photography film among other applications.
However, concerns regarding formaldehyde being hazardous to human health is posing a threat in impeding the market growth during the forecast period.
The utilization of formaldehyde as a disinfectant in the agriculture industry is burgeoning the market demand during the forecast period.
Formaldehyde in the form of disinfectant is used in the poultry industry in the hatcheries. The formaldehyde solutions as germicides are used for killing bacteria, viruses, and mould for the reduction of contamination. Additionally, the chemical in different formulations are utilized in slow-release fertilizers. Companies such as Hexion offer formaldehyde formulations like formaldehyde derivatives and urea formaldehyde for these fertilizers. Products include formaldehyde 52% solution, formaldehyde 50% solution, and urea formaldehyde concentrate. Thus, with the manufacturing of slow-release fertilizers that provide a sustainable supply of nutrition to plants for an extended time period, the market is projected to grow at a significant pace during the forecast period. The use of fertilizers is mainly supported by the growing global population with the growing global food demand for enhancing the crop yield. As per the World Bank, the global population is estimated to grow from 7.17 billion in 2013 to 7.674 billion in 2019.
As per the European Union predictions, the total population of the world is predicted to remain the main driver for the global food demand. In addition, the per capita consumption has also significantly increased. This is mainly attributed to the facilitation via trade where the per capita consumption has surged faster than the growing population. The growing income resulting in the consumption of food products that are of high-quality are gaining popularity. The change in consumption patterns have been observed with time along with the changing consumer preferences resulting out of societal habits, health concerns, and concerns regarding environmental and climate change issues. The consumption of meat and dairy products have also gained momentum with time in the developing economies of the world with the rise in income. Due to environmental concerns, a decline in the consumption of meat, specifically, red meat has been observed in the regions of Asia and Africa. However, the growth remained stable in the European Union and South American regions, whereas, in North America, the growth bolstered.
The presence of companies offering formaldehyde-based products along with strategic partnerships for formaldehyde projects are fueling the market growth during the forecast period.
Hexion Inc. is pioneer in the production of formaldehyde-based resins for forest products industry in North American region. The company, further announced of holding significant positions in the regions of Latin America, Australia, New Zealand, and Europe. The company’s formaldehyde-based resins are an important adhesive and binding ingredient that are utilized for the production of a wide variety of engineered lumber commodities. The products include medium-density fiberboard, particleboard, oriented strand board, and varied types of plywood, and laminated veneer lumber. The product finds huge applications in construction, furniture, and remodeling industries. Furthermore, the company offers formaldehyde as a crucial ingredient for the manufacturing of chemicals and products that include methylene diphenyl diisocyanate, and butanediol. The company’s formaldehyde products find applications in the agriculture, energy, and automotive industries as well. As the forest products and formaldehyde have a short shelf life, the manufacturing capabilities of the company are strategically based in close proximity to the customers.
Dynea, situated in Norway, is a specialist manufacturer of wood adhesives. The company is a pioneer with a strong production footprint in Europe. The company offers formaldehyde under specialty adhesive and polymers section. The formaldehyde is available in a wide range of concentration and quality grades. The product is produced in the form of an intermediate product.
Furthermore, the presence of companies collaborating for formaldehyde production projects are further providing an impetus in fueling the market growth during the forecast period. In 2019, the Clariant announced a partnership with Wuxi Xiyuan for two novel projects in order to supply their combined formaldehyde production technology. The new contracts are aimed towards increasing the number of customers that use Clariant’s state-of-the-art technology to six in a very short period of time. The fast rise in demand is attributed to the technology’s higher efficiency and selectivity in comparison to the conventional method of formaldehyde production that is based on silver.
The innovative solution is deployed by the Wuxi Xiyuan in its three formaldehyde plants situated in China and India. The fourth plant that is ready to use the technology is poised to be installed in the China, Jiangsu province. The operation is poised to start from Q2 2019. The predicted annual capacity of formaldehyde is around 240 kilotons.
Concerns regarding hazardous health effects of formaldehyde is predicted to impede the market growth during the forecast period.
Formaldehyde is known to have significant adverse health effects on humans. The chemical is a well-regulated substance, still heath agencies continue to evaluate its safety. For example, the World Health Organization and International Agency for Research on Cancer along with National Toxicology Program that lies within the United States Department of Health and Human Services filed formaldehyde as a carcinogen. The EPA, under its Integrated Risk Information System (IRIS), unveiled a draft of toxicological review of formaldehyde in 2010. This stated that the chemical fulfills the criteria of being described as carcinogenic to humans. The draft IRIS toxicological review was reviewed by the National Academy of Sciences and a report on April 2011 was issued. This criticized the IRIS review on formaldehyde toxicology, further stating that the methodologies and underlying science in the draft does not provide a clear conclusion that there is a causal link between formaldehyde exposure and leukaemia, and would further require a risk evaluation. The European Chemicals Agency (ECHA), classified formaldehyde as a category 2 mutagen with effect from 1st January, 2016. It also rejected its reclassification as a category 1A carcinogen. Hence, it is quite possible that novel regulatory requirements could be put forward on a wide scale so as to limit the exposure of formaldehyde to humans. The companies in the formaldehyde business would require to incur significant costs for meeting such regulatory requirements leading to the reduction in demand for the formaldehyde-based products. Additionally, the additional costs and reduction in demand, would, in turn, have an adverse effect on the companies’ operations and profitability. Hence, causing an impact on hampering the market growth during the forecast period.
As per the EPA, there have been highest levels of airborne formaldehyde detected in the indoor air. This is known to be released through varied consumer products like building materials, and home furnishings. The source of higher levels of formaldehyde is reported from novel manufactured or mobile homes in comparison to the traditional homes. The major sources reported are power plants, manufacturing units, exhaust emissions coming from the automobiles, and incinerators. In addition, it has been reported by the EPA that smoking is an important source of formaldehyde. Several acute and chronic effects of formaldehyde have been noticed. These include toxic effects caused by the chemical through the inhalation include eyes, nose, throat, and nasal cavity irritation. The effects observed on inhalation are coughing, chest pains, wheezing, and bronchitis. Formaldehyde, when ingested, results in the corrosion of the gastrointestinal tract and inflammation. Mouth ulcers, ulcers of esophagus, and stomach are also reported. On the other hand, the non-cancer chronic effects of formaldehyde include eyes, nose, and throat irritation. Continuous contact with formaldehyde liquid solutions have led to causing skin irritation and allergic contact dermatitis in human beings. Developmental and reproductive effects were also observed in female workers using formaldehyde resins.