For the Quarter Ending June 2021
Paraformaldehyde prices kept on rising across North America region backed by firm demand fundamentals amidst inadequate product availability. Despite of the abundant availability of feedstock Formaldehyde, price of Paraformaldehyde kept were on uptrend due to low production activities, However, the prices fluctuated with the feedstock availability during the month of April, while in May, steep rise was observed. In addition, due to other cheaper alternatives, the demand was running low, but the prices were rising majorly due to regional scarcity.
The Asian market reported firm sentiments for Paraformaldehyde during this quarter, bolstered by modest to high demand from the downstream sectors. Manufacturers in China were experiencing tremendous post pandemic growth, which was higher than any other country. Therefore, the demand from the domestic market was high from the downstream fertilizers and pesticides segment. While in India, demand remained dampened with the rise of second wave of pandemic in the country, that temporarily reduced the offtakes from the downstream manufacturers. However, the market scenario and price improved effectively during the month of June. The price of Paraformaldehyde settled at USD 796/MT towards the end of the quarter in India.
The European market reported stable momentum for Paraformaldehyde during this quarter, while the demand maintained stability from the specialised segments like resins and pesticides. The availability remained enough to satisfy all the end-use needs across the region. Therefore, no such changes were observed in the prices of Paraformaldehyde during this quarter. In addition, demand from other segments like disinfectant and preservatives remained low in major European countries.
For the Quarter Ending March 2020
US winter storm narrowed the production of feedstock Methanol across the US Gulf during Q1 2021, as more than 80% plants across US gulf remained idled during this quarter. Thus, the supply of Methanol remained low from December while several downstream converters were reporting lower inventory level. Severe shortage of upstream Methanol, amid high demand from fuel sector supported its prices and eventually pushed up the prices of its derivative chemicals including Formaldehyde and Paraformaldehyde across the region. The average prices of Paraformaldehyde hovered around USD 980 per MT across the region.
In the Asian market, demand for Paraformaldehyde remained firm from its derivative industries like plastics and resins. In January, service sector and industrial activities witnessed improvement, and hence the demand from these sectors showed consistent revival. Meanwhile, upstream Methanol supply across the region remained low, which led the rise in its prices and that of its downstream derivatives including Formaldehyde and Paraformaldehyde. Meanwhile, CRI (Carbon recycling International) announced the launch of a new CO2 to methanol production plant at Anyang, China. This plant would recycle 160,000 MT of CO2 each year, and hence will ultimately improve the supply of upstream Methanol across the region.
In the European market, demand for Paraformaldehyde from the downstream sectors like resins and plastics market showed improvements, which left positive impact on market sentiments across the region. Meanwhile, Equinor’s major Methanol production unit in Norway, resumed operations after a prolonged shutdown from December 2020, after a major fire outbreak in the plant. This plant has a capacity of 900,000 MT/year and covers around 25% of the total Methanol production in Europe. Thus, the resumption is likely to improve the availability of upstream Methanol across the region and may halt the price acceleration.
For the Quarter Ending December 2020
In Q4 2020, China witnessed sharp recovery in industrial and domestic activities post significant revival from COVID 19. Market sentiments were up, with respect to high demand for upstream Methanol and feedstock Formaldehyde. However ample inventories of the product led to rise in its prices. In China, price of upstream Methanol fluctuated in between 260-280 USD per tonne, this rise came due to supply shortage of upstream Methanol from Iran amid winter. Meanwhile in Indian market, prices of Paraformaldehyde witnessed steep climb in line with values of feedstock Formaldehyde. The prices of feedstock Formaldehyde rose from 147.5 USD/tonne (October 2020) to 205.1 USD/tonne (December 2020) in India. This rise came after shortage of Formaldehyde due to multiple plant shutdowns in North India under government compliance, as these plants were allegedly running without proper environmental clearance.
During Q4 2020, European market faced shortage of several feedstock chemicals to produce downstream products. Supply of Paraformaldehyde was also disturbed amid the shortage of upstream Methanol. This shortage of Methanol occurred due to a fire accident in Equinor’s major methanol plant in Norway, which consolidates around 25% of the total methanol production of Europe. This plant has a huge capacity of 900,000 tonne/year of Methanol. This shortage consequently led to rise in prices of feedstock Formaldehyde, PFA, and other derivative products.
Demand for PFA, Formaldehyde, and Methanol remained firm during Q4 2020, driven by the downstream demand from the Asian market with post recovery from COVID 19. Although the supply remained tight due to unplanned shutdowns and force majeure due to multiple hurricanes during the fourth quarter. Besides, the demand for PFA from domestic sector gradually improved in Q4 compared to the prior quarter which directly impacted its prices in the regional market.