Global Formaldehyde Prices Tumble as the Year Wraps Up With Demand Destruction

Texas, USA- Global Formaldehyde prices continuously showcased a feeble price trend with limited demand from the end-user industries. European producers have run their Formaldehdye manufacturing plants at lower rates to keep up with the declining market and adequate local supply. Suppliers have been trading the cargoes on a need-to basis. Prices have gradually lost ground, influenced by slow market offtakes and limited demand. However, there were attempts to reverse the trend by the producers, all confronted by weak demand. Exports of Formaldehyde from the Netherlands to Germany declined, and low market dynamics affected the price trend.

In Germany, the imports of Formaldehyde declined due to adequate stock and limited demand. Retailers ended up with an inventory surplus after importing goods earlier than usual, affecting the market fundamentals. Formaldehyde demand dwindles due to gloomy economic concerns and limited consumer trading. Lower netbacks, declining production costs, and weak demand front tumble significant producers' profit margins and revenue. With the week ending on 16th December 2022, the price of Formaldehyde slipped to USD 558/tonne CFR Hamburg with a weekly decline of 1.58%.

In the USA, the trading fundamentals also ended on a bearish note, where suppliers remain skeptical about bulk purchases due to brisk inventories. A readily available supply of Formaldehyde and limited demand from refineries continue to disrupt the supply/demand fundamentals. The current market trading landscape remained muted due to the depressed demand for Formaldehyde in the USA. Weak market sentiments and low product purchases hindered the market fundamentals. With the week ending on 16th December 2022, the Formaldehyde price in the USA slipped to USD 426/tonne FOB Texas.

As per ChemAnalyst, the Formaldehyde price in the global market will gain momentum with the start of the New Year. A more significant proportion of Formaldehyde in Europe is expected to trade on a spot basis moving into 2023, reviving demand from the downstream preservative industry. Formaldehyde production among the major manufacturing units in the USA will increase at the start of the new year as producers acknowledge that demand conditions in downstream markets will improve.