The Formaldehyde market continued to witness a notable upward trend in the last week of February 2025. The prices increased from the past few weeks considerably as compared to the previous week. This rise was primarily driven by robust demand from downstream construction and automotive sectors. The demand was steady while supply faced challenges which pressured the prices of Formaldehyde in upward direction.

The outlook for Formaldehyde market remains resilient in the near time on the back of firm consumer demand and continued supply chain disruptions in the regional market. Additionally, the ongoing rise in energy prices could impact the production costs much higher, further impacting the pricing dynamics.

Moreover, the downstream construction sector is anticipated to contribute significantly to the surge in the prices owing to rise in infrastructure projects, which might fuel the demand for materials like formaldehyde- based resins, insulation materials and adhesives. On top of that, the automotive sector, a major consumer market where formaldehyde finds its applications is also poised to support the bullish outlook for Formaldehyde derived components. The complex game between supply and demand fundamentals may pressure the prices in the upcoming weeks unless there is a major shift in demand dynamics.

On the supply side, the feedstock Methanol prices rolled over in the week. The prices of Methanol declined by 2.7% and maintained the downward trajectory in the USA market for the past four weeks. However, the declining feedstock prices did not have any major impact on Formaldehyde prices as surge in demand from downstream construction and automotive sectors and reduced supply offset the downward pressure from declining feedstock prices. Overall, the supply chain challenges and consistent rise in the demand led to the bullish trend in the market.

On the other hand, the demand from the downstream construction market witnessed rising costs and higher raw material prices in the recent weeks. The rise in equipment and operational costs mainly in the material and machineries supported the demand for Formaldehyde. Furthermore, this uptick is also attributed to gradual recovery in enquiries for materials such as Phenolic resins backed by improved weather conditions, allowing market participants in sectors such as laminates, coatings and molding compounds to resume operations.

Supply chain constraints and tariffs on steel imports further pushed costs higher, impacting the availability and pricing of construction-related chemicals. With expectations of continued inflation in construction materials and increased demand for formaldehyde-based products, prices are likely to remain elevated in the near term unless a demand slowdown or raw material cost correction occurs. Additionally, the automotive sector was expected to rebound in February from slow January result which further led to increased demand for Formaldehyde in the market. Overall, robust demand from downstream sectors and supply disruptions in the market continued to put upward pressure on the prices leading to the bullish sentiment in the market.