Global Formaldehyde Prices Start to Gain Stance After Tightening Natural Gas Prices
- 29-Aug-2022 5:07 PM
- Journalist: Jai Sen
Shanghai, China- In the Asian market, existing inventories among the major Formaldehyde enterprises are utilized, and demand for new stocks has remained robust. In the upstream Methanol market, prices gain a stance due to surging demand and oscillations in Natural Gas and coal values. The gradual increase in Formaldehyde prices will also increase the downstream enterprises' production rate, mainly the preservative industry.
With the week ending on 26th August, the price of Formaldehyde in China stabilized to USD 201/ton FOB Shandong. However, the availability of Formaldehyde remains ample as major operating units have operated their plants with compatible efficiency, resulting in oversupplies.
The average production rate of Formaldehyde dropped due to a gradual increase in inventories among the manufacturing units. There is room for a further decline in supply as the market fundamentals surge in the domestic market.
Russia has flared Natural Gas at the Portovaya plant in the European market while drastically cutting Natural Gas flow from Russia to Germany, affecting the Petrochemical market. The 3-day suspension of Natural Gas flow was due to maintenance work at the Trent 60 compressor station, which surged the prices of the downstream derivatives, including Formaldehyde. Germany will reduce the sales tax on Gas to ease the financial pressure from producers who will be paying the gas levy from October as Europe's biggest economy looks to avoid a wave of bankruptcies at its energy companies. The growing demand for convenience foods drove the food preservative industry, and the longer shelf life for processed foods further boosted the price.
According to ChemAnalyst, the Global Formaldehyde prices will increase with surging Natural Gas values. The upstream Natural Gas market is surging, accelerating the costs of the entire Petrochemical chain. In terms of inventories, production cuts due to the limited availability of raw materials decreased the stocks and further pressured the end-user industries to meet consumers' demands.