MARKET RESEARCH

Most formaldehyde producers are concerned primarily with satisfying captive requirements for
derivatives and/or supplying local merchant sales.
Formaldehyde is usually produced close to the point of consumption since it is fairly easy to make, is
costly to transport, and can develop problems associated with stability during transport. As a result,
world trade in formaldehyde is minimal.
World consumption of 37% formaldehyde is forecast to grow at an average annual rate of about 4%
from 2015 to 2020. Growth during 200609 was marginal, largely as a result of the global recession.
Northeast Asia, especially China, continues to add capacity for formaldehyde, reigning as the
largest producer globally.

China is the single-largest market for formaldehyde, accounting for 42% of world demand in 2015;
other countries with large markets include the United States, Germany, the Netherlands, Spain, Italy,
Belgium, Poland, Russia, India, South Korea, Japan, Brazil, and Canada.
China is forecast to experience high growth rates and significant volume increases in demand for
37% formaldehyde during 201520.
China now produces and consumes one-third of the world's formaldehyde. The largest amount of
formaldehyde finds application in the manufacture of Resins, viz., Phenol Formaldehyde (PF), Urea
Formaldehyde (UF) and Melamine Formaldehyde (MF) - which finds applications in laminates, plywood,
MDF, particle board and hard boards. UF, MF and PF resins accounted for approximately 66% of world
consumption.

DEMAND IN INDIA:

Formaldehyde is one of the major organic chemicals produced in India.

Almost all the consuming sectors of Formaldehyde have witnessed growth rates of more than 5% in the
past 5 years, indicating a strong demand of Formaldehyde in the present market scenario.
Resin Industry is the largest consumer of Formaldehyde accounting for more than half the domestic
production of the country and expected to achieve growth rates close to 10% in the next 5 years.
Uses as a direct and intermediate solvent are other major consumers of Formaldehyde in the country
expected to witness modest growth in the coming years.
Southern region of the country is the largest hub of Formaldehyde consumption, accounting for almost
half of domestic Formaldehyde consumption. Other regions of the country share approximate similar
Formaldehyde requirements, which are however, expected to increase in the future.
The market study firmly establishes a growing demand in India for Formaldehyde, which has been
increasing over the years, but in a non-continuous manner.
Formaldehyde demand is met through domestic production.
Formaldehyde demand is driven by use as solvent for a plethora of industries as well as exports. India
also exports moderate volumes of Formaldehyde. However, the production of Formaldehyde is not up to
the full capacity because of the lower demand of the chemical in the country.
Kanoria, Allied Resins and Allied Chemicals Ltd, INA India Ltd. and Aldehyde India are the chief
Formaldehyde manufacturers in the domestic market.
Though demand has seen a modest growth, it is still playing catch up to the domestic production. India's
excess domestic production mandates producers and exporters to export Formaldehyde.
Currently, Nepal is the biggest importer of Indian Formaldehyde, importing more than half of the total
quantity exported from India. Sri Lanka, Kenya, Bhutan and UAE also hold the rest amount of share.
Although, India needs to further expand its percentage of exports and increase the production up to its full
capacity so as to enhance the export market.
The five largest markets for formaldehyde are North America, Europe, Latin America, Middle East and
China.