Urea Formaldehyde Market - Forecast (2022 - 2027)

The Urea Formaldehyde Market size is forecast to reach $12 billion by 2027, after growing at a CAGR of 4.5% during 2022-2027. Urea Formaldehyde is a non-transparent thermoset synthetic resin obtained from a chemical mixture of urea and formaldehyde. Increasing construction activities augmented the use of urea formaldehyde as an insulating and adhesive agent. Urea formaldehyde is also used in molding electrical devices and bottle caps, among others. Exceptional properties of urea formaldehyde such as high strength and ability to withstand high temperature are driving the growth of the market. The surging use of urea formaldehyde as a source of nitrogen fertilizer in the agricultural field is also fueling the growth of the urea formaldehyde market.

Report Coverage

The report: “Urea Formaldehyde Market - Forecast (2022-2027)” covers an in-depth analysis of the following segments of the Urea Formaldehyde Market.

• By Application: Particle board, Plywood, Medium-Density Fiberboard, Adhesive, Fertilizers, Molding Objects, Anti-Cling Agent, and Others.
• By End-Use Industry: Electronics, Agrochemicals, Automotive and Transportation, Building & Construction, Paper & Pulp, Textile, Wood Industry, and Others.
• By Geography: North America, South America, Europe, APAC, and RoW.

Key Takeaways

• China is home to the largest textile production industry with an export value of more than $ 266 million in 2018. The flourishing textile industry in China boosts the growth of the urea formaldehyde market.
• Increasing restrictions on the use of urea formaldehyde resins and the growing popularity for urea formaldehyde alternatives owing to toxicity concerns, are a few factors anticipated to hinder the growth of the market.
• Outbreak of coronavirus has disrupted the supply chain which in turn slowed the growth of the urea formaldehyde market.

Urea Formaldehyde Market Segment Analysis - By Application

The Particle board segment holds the largest share of more than 30% in the urea formaldehyde market in 2019. Particle board is a waste wood product that is made by mixing saw dust with adhesives. Owing to its properties such as low cost, ease of use under a variety of curing conditions, versatility, and low curing temperature, Urea formaldehyde resins are extensively used as an adhesive for particle boards. Increasing the use of particle boards in the formulation of furniture, underlayment, and substrate for countertops also escalates the use of urea formaldehyde resin. Food and Agriculture Organization estimated that global production of particle wood increased by 1% accounting for 245 m3 million in 2018. In addition, U.K consumption of particle board reached 2774000 m3 in 2019, according to Wood Panel Industries Federation (WPIF). Thus, the continuous increasing demand of particle board may boost the growth of the urea formaldehyde market.

Urea Formaldehyde Market Segment Analysis - End-Use Industry

Based on the end-use, the building & construction segment hold the largest share of more than 35% in the urea formaldehyde market. Urea formaldehyde foams have good insulating properties and are used as a thermal insulator in walls, where it is impractical to provide conventional insulation. Thus, the accelerating use of plywood, and medium density fiberboard in construction activities have boosted the use of urea formaldehyde. For instance, according to the U.S Census Bureau report, in the US, 903,000 single-family homes completed in 2019, whereas, 814,000 were framed in wood, and while 86,000 were framed using concrete. Thus, the growth in the construction sector fuels the growth of this market. Furthermore, in order to achieve sustainable urban development, the government of France pledged to build all public buildings with at least 50% of wood or other sustainable materials by 2022. Thus, an increase in wooden constructions across the country further boost the growth of the urea formaldehyde market.

Urea Formaldehyde Market Segment Analysis - Geography

Asia Pacific has dominated the urea formaldehyde market with a share of more than 35% in 2019 followed by North America and Europe. Population growth coupled with rapid industrialization and urbanization is driving the growth of urea formaldehyde in developing nations. Textile fibers are treated with urea formaldehyde to give them all sorts of easy-care properties such as Anti-cling, anti-shrink, Moth proof, Waterproofing, and stain resistance. Increasing demand for apparel and expansion of textile industries across the country is aiding the growth of the market. According to Indian Brand Equity Foundation (IBEF), India’s textile and apparel exports accounted for US$ 38.70 billion in 2019 and are expected to increase to US$ 82.00 billion by 2021, subsequently augmenting the demand for urea formaldehyde. Urea Formaldehyde has physical properties of high hardness, good arc and tracking resistance, making it suitable for strong, knock-resistant electrical fittings. The surging use of urea formaldehyde for molding electrical products also fuels the growth of the market.

Urea Formaldehyde Market Drivers

Growing demand from agrochemical industries

Urea formaldehyde is used in the agricultural field as a source of slow-release nitrogen fertilizer. In addition, to improving soil permeability, and slow release rates, urea formaldehyde fertilizers also promotes the formation of an aggregated soil structure. Urea Formaldehyde fertilizers degrade in the soil by microbes and decompose to urea and formaldehyde where urea is used as a nitrogen source and encourages the healthy development of foliage and fruit. According to the Food and Agriculture organization (FAO), world food demand may increase by 70 per cent by 2050. Thus, an increase in global food demand may augment the growth of the urea formaldehyde market.

Increasing usage of paper and restrictions on plastics

Urea formaldehyde resins are used in papermaking for enhancing the wet strength of paper and result in less dulling of the whiteness of the paper. The surging use of paper to overcome the environmental impacts of plastics, is driving the growth of the urea formaldehyde market. According to the environmental paper network (EPN), paper use is steadily increasing year on year and exceeded to 400 million tons per year in 2018. Moreover, government regulations to lower the use of plastics also boost the growth of the market. For instance, New York has restricted the use of plastics by passing Senate Bill 1508 in 2019. California also introduced a regulation known as SB270 in July 2015 for prohibiting the use of plastic at groceries, pharmacies and other stores.

Urea Formaldehyde Market Challenges

Harmful effects of formaldehyde and government regulation

A major drawback of urea formaldehyde adhesive compared to other thermosetting resins like phenolic formaldehyde and polymeric diisocyanate is its low moisture resistance especially at elevated temperatures. In addition, the reversal bond-forming reactions can lead to the release of formaldehyde. Exposure to formaldehyde may cause burning sensations in the eyes, nose, and throat; coughing; wheezing; nausea; and skin irritation. In 2011, the National Toxicology Program, considered formaldehyde as a known human carcinogen. Government regulations on the emission of formaldehyde may hamper the growth of the urea formaldehyde market. The Formaldehyde Standards for Composite Wood Products Act of 2010 establish emission standards for formaldehyde from composite wood products. In December 2016, the Environmental protection Agency (EPA) published a rule to reduce exposure to formaldehyde emissions from certain wood products produced domestically or imported into the United States.

COVID-19 impact on the global market

COVID-19 poised major challenges for the urea formaldehyde market. The coronavirus pandemic has not only disrupted organization and industries but it has also created tremendous stress for workers. The government’s shutdown in various part of the country has lowered the construction, automotive, and textile manufacturing. Lack of manpower has led many manufacturing companies to stop their production, which further results in their downfall. As, Urea formaldehyde is used in automobile tires to improve the bonding of rubber to tire cord. Thus, the decline in automobile demand and production also hamper the market growth. According to China Passenger Car Association, China’s passenger car retail sales in April 2020 fell by 5.6% from a year earlier to 1.43 million. Thus, a decrease in automotive sales also hampers the demand for urea formaldehyde from the automotive sector.

Market Landscape

Technology launches, acquisitions and R&D activities are key strategies adopted by players in the urea formaldehyde market report. In 2019, the market of urea formaldehyde has been consolidated by the top 10 companies accounting for xx% of the share. Major players in the urea formaldehyde market are, BASF SE, The Dow Chemical Company, Ashland Global Holdings Inc., DuPont de Nemours, Inc., Kronospan Ltd., Sherwin Williams Co., Hexion Inc., Ercros SA, Chemiplastica AB and Advachem SA., among others.

Acquisitions/Technology Launches

• In June 2019, Bolivia’s government has re-launched a tender to expand the ammonia and urea complex in the Cochabamba department. State Hydrocarbon Company announced the installation of a urea formaldehyde concentrate (UFC) plant. This project involve a US$36mn plant to produce 20t/d of UFC.

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