# Formaldehyde: Cycles

How housing slumps and gas shocks squeeze resin makers

Source page: https://www.materialinsights.org/chemicals/formaldehyde/cycles/

What this tab covers How its prices and margins move: past booms and busts with price levels, the spread or margin that the industry watches, the drivers of the cycle and the metrics to track.

Formaldehyde has no independent price cycle: it follows methanol, with a conversion margin of a few tens of dollars per tonne of formalin. Demand follows housing and furniture, especially in China, where the property slowdown since 2021 has weighed on panels. Price spikes come through methanol, as in 2022 in Europe and during the 2026 Hormuz disruption in India. Margins are protected somewhat by the fact that formalin is hard to import, so local producers face little foreign competition.
 The spread to watch **Formalin minus methanol**

Formalin (37%) price minus about 0.43 t methanol (0.37 x 1.15). Example: India FOB formalin $294/t (Jul 2026) against CFR India methanol of about $380-420/t (Crisil FY2027 outlook) gives raw material of about $165-180/t and a spread of about $115-130/t (indicative; basis of the formalin price not stated).

#### Booms and busts

1. 2021-2023

China's property downturn cut panel demand while coal costs swung methanol prices; producers' margins were squeezed (qualitative).

not public in sources reached

2. 2022

European gas prices pushed methanol and formaldehyde costs up sharply; some European resin makers cut output.

gas cost of methanol about $1,150/t at 2022 European gas of $40.3/MMBtu (derived, indicative), passed through to formalin

3. 2026

Hormuz disruption lifted CFR India methanol by about 130-141% y/y in April-May (Crisil); formalin prices followed, then eased from June.

India formaldehyde FOB about $535-538/t (Mar-Apr 2026) against about $289-294/t (Jun-Jul 2026) (Procurement Resource; series inconsistent, indicative)

#### What drives the cycle

- **Methanol price.** 80-90% of cost; formalin follows it within weeks.
- **Housing and furniture.** UF and MF resins go into panels and laminates.
- **Emission regulation.** Tighter E1/E0 and EU limits shift demand to low-emission resins and pMDI.
- **POM and MDI capacity.** Large captive users add demand in blocks in China.

#### Metrics to track

| Metric | Why it matters | Where to track it |
|---|---|---|
| **Methanol CFR China and CFR India** | cost driver | Argus, ICIS, S&P Global Platts |
| **Formaldehyde regional prices** | conversion spread | Procurement Resource, ChemAnalyst |
| **China wood-panel output and housing starts** | demand | China National Bureau of Statistics |

## Other sections

- [Summary](https://www.materialinsights.org/chemicals/formaldehyde/index.md)
- [Overview](https://www.materialinsights.org/chemicals/formaldehyde/overview/index.md)
- [Correlation](https://www.materialinsights.org/chemicals/formaldehyde/correlation/index.md)
- [Production route](https://www.materialinsights.org/chemicals/formaldehyde/routes/index.md)
- [Production](https://www.materialinsights.org/chemicals/formaldehyde/production/index.md)
- [Feedstocks](https://www.materialinsights.org/chemicals/formaldehyde/feedstocks/index.md)
- [Trading](https://www.materialinsights.org/chemicals/formaldehyde/trading/index.md)
- [Movement](https://www.materialinsights.org/chemicals/formaldehyde/movement/index.md)
- [Regulation](https://www.materialinsights.org/chemicals/formaldehyde/regulation/index.md)
- [Characteristics](https://www.materialinsights.org/chemicals/formaldehyde/characteristics/index.md)
- [Emissions](https://www.materialinsights.org/chemicals/formaldehyde/emissions/index.md)
- [Relationships](https://www.materialinsights.org/chemicals/formaldehyde/links/index.md)