Consumption of formaldehyde depends mainly on the construction, automotive and furniture markets. In the developed world, growth in demand will typically track gross domestic product (GDP) although it will be strongly correlated to the construction industry.
Formaldehyde is usually produced close to the point of consumption since it is fairly easy to make while it cannot be shipped easily over long distances. It can develop stability-associated problems during transport. As a result, world trade in formaldehyde is minimal.
Formaldehyde is commercially offered as a 37% to 50% aqueous solution, with 37% being the most widely used grade which may also contain 0-15% methanol and a polymerisation inhibitor.
The main downstream demand for formaldehyde around the world is in production of thermosetting resins. The largest group is the amino resins produced by condensing either urea or melamine with formaldehyde.
Urea formaldehyde (UF) resins are the largest sector. Binders in non structural wood based panels are the largest application, in particular for particleboard and medium density fibreboard (MDF).
Melamine formaldehyde (MF) resins are used predominantly as paper impregnating resins for surfacing of panels, for example in laminate flooring and as binders and adhesives where improved water resistance is required. The automobile industry also consumes MF resins in the form of clear coats.
The next largest outlet for formaldehyde is phenolic formaldehyde (PF) resins. Being water resistant, they are used as durable binders and adhesive in structural wood panels and as binders in mineral wool insulation. Their high thermal stability and fire resistant properties are utilised in a wide spectrum of uses in the automotive and construction industries including brake linings, foundry binders, insulation foams and composites. There is also a growing use in the oil industry to enhance oil well productivity.
According to SRI Consulting, UF, MF and PF resins accounted for approximately 63% of world demand in 2009.
After thermosetting resins, the next largest use for formaldehyde is in production of polyacetal or polyoxymethylene (POM). Polyacetals are tough engineering thermoplastics used in a variety of applications such as replacing metals in electrical, electronic, automotive and consumer applications.
Methyl di-p-phenylene isocyanate (MDI) is the fastest growing of the formaldehyde derivative markets. Primary uses are for polyurethane foam, binders, polyurethane elastomers, adhesives and sealants. Markets include construction, household appliances, footwear and other consumer goods, and automotive.
Butanediol (BDO) can be manufactured using formaldehyde. Most BDO is used to produce intermediates for downstream production of polyester thermoplastics resins used in the textile fibres, electrical/electronic and automotive markets.
Pentarythritol is produced by the alkaline condensation of formaldehyde with acetaldehyde. Primary uses are for alkyd resins, lubricants, tall oil esters. With a decline in solvent based coatings, demand for pentaerythritol is falling around the world.
The five largest markets are North America, Europe, Latin America, Middle East and China.
Formaldehyde demand growth slowed down in 2008-2009, this was due to a slowdown in the global property market. However, it is believed that from 2010 this should improve on the back of demand for specialty chemicals.
According to SRI Consulting, world consumption is forecast to grow at an average annual rate of 4.0% during 2009–2014.
SRI Consulting further says that significant-to-rapid demand growth in Asia, mainly China, for most applications will balance out moderate growth in North America, Western Europe, Africa and Oceania. Central and South America, the Middle East, and Central and Eastern Europe are forecast to experience significant growth in 2009-2014 due to increased production of wood panels, laminates, MDI and pentaerythritol.
The formaldehyde market in North America has decreased by over 15%, since 2006. The significant reason to the decline in formaldehyde demand has been the impact of the poor housing market and the construction industry.
According to Momentive Specialty Chemicals (formerly known as Hexion), the formaldehyde market in North America is at just over 4m tonnes (at 37% concentration) and is roughly half of that of Europe.
North American market for amino resins is non structural particleboard production which appears to be declining while the domestic ready-to-assemble (RTA) furniture market has been devastated by imports from China. Trends in flooring have boosted the growth of melamine surfaced MDF. Further growth of the laminate flooring market is expected.
North American market for phenolic resins, which are used mainly as adhesives in production of oriented strand board (OSB) and plywood. Since its introduction 25 years ago, the use of OSB as a structural panel in house construction has grown rapidly replacing the more expensive traditional plywood. Phenolic resins are also used as a binder for thermal insulation used in housing and construction.
The largest non-forest product consumer of formaldehyde is polyacetal resin. This is followed closely by MDI production used in the growing polyurethanes industry.
In conclusion, it is believed that formaldehyde demand will depend on economic recovery, especially in the housing and construction industries.
Updated: October 2010
Sources: Jim Jordan & Associates, 2010 Methanol forum 14-16 September 2010; Hexion, Formaldehyde Outlook and Health Issues Update, 14-16 September 2010; SRI Consulting CEH Formaldehyde profile; plants and projects, ICIS and Outlook '10: China will drive global methanol market, ICIS news.
The commercial production of formaldehyde was first started in Germany in the 1880s but the development of a methanol synthesis route in the 1920s gave the spur to the development of large-scale manufacture. Today there are two main routes: oxidation-dehydrogenation using a silver catalyst involving either the complete or incomplete conversion of methanol; and the direct oxidation of methanol to formaldehyde using metal oxide catalysts (Formox process).
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