Quarterly Update on Global Formaldehyde Market
For the Quarter Ending June 2021
North American market witnessed an overall decline in prices of Formaldehyde during this quarter, due to reduced demand from the end user segment. Initially, during April, prices rose due to shortage of feedstock Methanol in USA, which later improved effectively in May and June. Meanwhile, the demand remained low from downstream disinfectant segment in the country during this quarter, while the availability remained abundant that led to a decline in its prices. In the meantime, the demand from resin manufacturers remained modest to low in USA, and very less numbers of purchase orders were obtained by the manufacturers from the global market. Therefore, after reaching peak till the end of May, prices fell effectively and reached USD 540/MT in the last week of June in USA.
Asian marked witnessed frequent fluctuation in Formaldehyde values during this quarter, on back of fluctuation in demand from respective downstream sectors. In India, prices of Formaldehyde increased till May end due to expensive cargoes from Germany and USA, which later declined in June following the fall in feedstock prices in respective origin country. Most of the cargoes in India were received from Germany in this quarter followed by USA and UK. Therefore, prices of Formaldehyde revolved around USD 274/MT during last week of June in India. While in China, similar scenario was observed, where prices fluctuated frequently with fluctuations in demand from downstream sectors. Most of the demand came from industrial disinfectant segment.
Europe experienced modest demand for Formaldehyde during this quarter, where values of feedstock Methanol played an important role in price fluctuations across the region. Methanol prices remained high initially in the month of April, due to short supplies from major producers. In addition, the demand from derivative segment of Formaldehyde remained modest to low in the meantime, like Paraformaldehyde, Urea-formaldehyde resin and Phenol-formaldehyde resin, due to slow pace economic recovery.
For the Quarter Ending March 2020
In the Asian market, the demand for Formaldehyde remained firm from its derivatives sectors like plastics and resins initially, due to improvement in industrial activities across the region. During Q1 2021, supply for feedstock Methanol remained low due to several planned and unplanned turnaround in several companies in Middle East which ultimately supported its prices in the Asian market. In addition, Carbon Recycling International (CRI) announced the allocation of new CO2 to Methanol production unit in Anyang China, which will recycle 160,000 Tonnes of CO2 per year. This upcoming unit is expected to improve the feedstock Methanol availability in the country.
European Formaldehyde market improved in Q1 2021, the improved demand from downstream sector like resins, food and plastics enhanced the market sentiments across the region. In addition, Equinor’s major Methanol plant in Norway resumed its production after months of prolonged shutdown due to a fire hazard in December 2020. As this plant accounts more than 25% of total Methanol production in Europe and incurs a massive plant capacity of 900,000 MT/year, the shutdown impacted the production of Formaldehyde across the region in the first quarter of 2021. Following the resumption, supply crisis for Formaldehyde in Europe will considerably improve which will further slow down its price increment all over the Europe.
US Formaldehyde market experienced shortage of supply during Q1 2021 due to significant shortage of feedstock Methanol across the region. Winter storm in gulf region sparked fire on the ongoing crisis of feedstock Methanol, which was previously started during Q4 2020 due to multiple hurricanes across the region. Major Methanol and Formaldehyde plants faced power outages across Texas, due to freezing weather conditions. In line with the substantial demand for feedstock Methanol for fuel, and insufficient supply, prices of Formaldehyde rose rapidly, but this price acceleration is anticipated to stabilize with the arrival of summers in the region.
For the Quarter Ending December 2020
During Q4 2020, China faced sharp recovery in feedstock Methanol market post the healthy revival from COVID-19 crisis. In expectations of tight Methanol supply from Iran during Q4 2020 in China, the prices of Methanol fluctuated in a range of 260-280 USD/MT in the end of November 2020. These shortages triggered sharp rise in the Formaldehyde pricing during the quarter. In India, Formaldehyde supplies remained disturbed due to the shutdown of some manufacturing plants in North India. These shutdowns occurred due to the issue of environmental clearances, allegedly many plants were running their operations without/expired environmental clearances. That resulted in shortage of supply of Formaldehyde in India and eventually led to increase in prices from USD 147.5 per tonne in September 2020 to USD 205.16 per tonne in December 2020.
Equinor, a major Methanol production company of Europe had fire broke out in a high-capacity Methanol production plant in Norway during December. This plant accounts more than 25% of the total Methanol production in Europe having a capacity of 900,000 tonnes/year. This shut down affected Formaldehyde production in Europe. Shortage of upstream products induced substantial hike in the prices of Formaldehyde and other derivative products.
In the US Methanol market, the Methanol production remained low in effect of unplanned plant shutdowns in gulf, due to Hurricane Zeta in November. The fair global demand of methanol in winter season and shortage of supply led to an increase in its prices as well as the prices of its downstream product Formaldehyde. The downstream market was recovering and surging during final quarter 2020, especially in the Asian countries. So, the imports from USA also increased, though the production of Formaldehyde remained low to satisfy the demand.