LONDON--(BUSINESS WIRE)--Technavio’s latest report on the global formaldehyde market provides an analysis on the most important trends expected to impact the market outlook from 2016-2020. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.
Chandrakumar Badala Jaganathan, a lead analyst from Technavio, specializing in research on specialty chemicals sector, says, “The global formaldehyde market is expected to reach 50 million tons by 2020, growing at a CAGR of close to 6% during the forecast period. Formaldehyde is a versatile and significant chemical that is manufactured on an industrial scale and is used in industrial processes for a wide range of applications. Most of the manufactured formaldehyde is combined with other substances for producing formaldehyde-based resins or glues. Formaldehyde-based resins serve as excellent adhesives and low-cost materials that play a significant role in construction and furniture applications.”
The top three emerging trends driving the global formaldehyde market according to Technavio chemicals and materials research analysts are:
- Advances in technology
- Emerging alternatives to formaldehyde in composite wood binders
- Use of formaldehyde for fuel production
Advances in technology
The manufacturers in the global formaldehyde market have increased their expenditure in R&D to develop production processes that help to decrease their production costs, owing to the increasing production capacity in APAC and the reducing prices of formaldehyde derivatives worldwide. Factors like cheaper labor, easy availability of raw materials, and lenient regulations are helping to decrease the production costs in APAC.
In 2020, the global production capacity of formaldehyde surpassed 45 million tons. In the same year, APAC held a 62% share of global production capacity. The region was followed by Europe and North America. China was an unrivalled leader in terms of formaldehyde capacity, accounting for more than 51% of the total production capacity.
In addition, as governments in the Americas and Europe have implemented stringent laws for formaldehyde exposure in the workplace, manufacturers are being pressurized into developing safer ways for formaldehyde production. This has resulted in the development of newer production processes with lower operating costs, making it easier for the manufacturers to maintain their profit margins. For instance, the turbocharger concept for formaldehyde production, developed by Johnson Matthey Formox, uses less electricity for the production process, thereby reducing the overall operating costs.
Emerging alternatives to formaldehyde in composite wood binders
Urea-formaldehyde-based resins have been extensively used as binders to glue particles in particleboard, wheat board, medium-density fiberboard, and other wood composite products. However, the growing concerns regarding the risks of cancer and lung disorders caused by the exposure of formaldehyde have encouraged the search for alternatives.
Growing emphasis on green and sustainable buildings and emission regulations regarding the chemicals used for processing or manufacturing wood or wood composites for home applications are driving significant changes in the composition and technology of these resins. Manufacturers in the market are shifting toward measures to reduce the emissions of formaldehyde or eliminate the compound entirely from their products.
The soy flour component is a renewable resource and is being studied as an alternative for formaldehyde. However, these compounds may contain plant estrogens that many cause allergic reactions in a few individuals. This side-effect is not as significant as the formaldehyde- and methylene diphenyl diisocyanate-based binders and manufacturing processes will completely eliminate these compounds from the product.
“Apart from soy-based alternatives, manufacturers in the market are focusing on the development of urea-formaldehyde resins with additives such as melamine to reduce the emissions of formaldehyde,” says Chandrakumar.
Use of formaldehyde for fuel production
The use of formaldehyde for fuel production is one of the minor trends being witnessed by the global formaldehyde market, especially in China. Many countries are seeking newer sources for cheaper oil.
This has increased the R&D for natural substitutes and newer approaches for producing traditional fuels at lower costs. Formaldehyde is being tested by various companies in China as it can be used as a chemical intermediate for producing fuel from coal. The development and application of this process are still in the nascent stage and will have a significant impact on the growth of the market if commercialized successfully during the forecast period.
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