The focus of formaldehyde market shifted downwards in the first half of January

price trend
The price center of mainstream production areas is slowly shifting downwards. According to the monitoring of the commodity market analysis system of Shengyi Society, as of January 16th, the average price of formaldehyde in Shandong region was reported at 1026 yuan/ton, a decrease of 1.08% from the beginning of the month.
Analysis of Core Influencing Factors
The core contradiction in the current market is that “costs are supported, but demand lags behind”, resulting in a double squeeze on prices and profits.
1. Loose supply
The overall operating rate of the industry is not high, but due to weaker demand, the market’s spot supply is still sufficient.
2. Weak demand (core drag)
Dragging on the board industry: The downstream artificial board industry, which is the largest source of formaldehyde, continues to experience a contraction in demand due to factors such as high real estate and raw material costs, as well as intense industry competition, resulting in rigid procurement of formaldehyde. Other downstream self use is the main focus: fine chemical downstream industries such as formaldehyde and Urotropin have poor profits and mainly rely on digesting supporting formaldehyde, resulting in low demand for external purchases.
3. Poor cost transmission
The expected decrease in the import volume of raw material methanol, coupled with significant destocking at ports, has driven up methanol prices. As of January 16th, the benchmark price of methanol in Shengyi Society was 2250.83 yuan/ton, an increase of 1.96% from the beginning of the month. But it is difficult to effectively transmit to the selling price of formaldehyde, and downstream acceptance is poor. In order to control inventory, factories can only sell at a discounted price.
short-term outlook
In the short term, the formaldehyde market is expected to continue the pattern of “weak stability stalemate”. The rise in costs supports downward space, but weak demand and inventory pressure from factories further suppress any potential for an increase. Whether the market can break the deadlock depends on whether the downstream sheet metal industry’s production and stocking situation has improved beyond expectations.