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Sufficient Formaldehyde Supply Subdues Prices in Chinese Market

Sufficient Formaldehyde Supply Subdues Prices in Chinese Market

Sufficient Formaldehyde Supply Subdues Prices in Chinese Market

  • 01-Jun-2022 5:27 PM
  • Journalist: Nina Jiang

Shandong, China- The upwards rally of Formaldehyde observed a halt in the past few weeks, and FOB Shandong price eased down with oscillations in the feedstock Methanol price trend. As of 27th May, the price of Formaldehyde in the Chinese market slipped to USD 198/ton FOB Shandong.

The formaldehyde market remained on the lower end due to gradual declination in demand and high inventory levels across Asia. Due to domestic public health incidents, the downstream preservative industries remained weak due to difficulties in cargo transportation, and demand declined.

When we focus on the sentiments of the upstream market, raw coal prices and oil costs remain firm, and downstream Tianjin Bohua MTO is expected to be put into production in the upcoming weeks. Methanol prices are still struggling to rebound due to ample supply from Iran and Saudi Arabia, which impacted the price trend. However, logistical delays continued to weigh on the Asian petrochemical market, but the ease in container prices temper the traders and suppliers overseas.

According to a trusted source in China, “Feedstock Methanol cargoes traded in recent days had already loaded and were on their way to China”.

As per a market source, maintenance turnaround at a significant Formaldehyde producer starting in the second half of the month is likely to affect the offtake volumes. Muted behaviour across the downstream preservative value chain further impacted the Chinese Formaldehyde pricing this week.

Downstream consumers were still cautious over the incessant price as Methanol accounts for a sizable chunk of the Petrochemical’s profits.

As Formaldehyde output loss in China has further widened the supply-demand gap, ChemAnalyst believes that this miserliness will likely act as a demand detractor for the Chinese Formaldehyde price in the coming weeks. With the recovery of the Methanol supply, the upstream price decline is expected in the coming months. However, demand for downstream preservatives will increase due to the expected plant turnaround in the coming months.

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