Formaldehyde Market Size, Share & Trends Analysis Report By Derivative Type (Urea Formaldehyde (UF), Phenol-formaldehyde (PF), Melamine formaldehyde (MF), Polyacetal Resins, Pentaerythritol, 1,4 Butanediol, Methylenebis, Hexamethylenetetramine (HMTA), Others), By End User (Building & Construction, Automotive, Furniture, Textile, Healthcare, Oil & Gas, Agriculture, Water Treatment, Cleaning Products, HVAC) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2025-2033

Formaldehyde Market Size

The global formaldehyde market size was valued at USD 8.38 billion in 2024 and is projected to grow from USD 8.89 billion in 2025 to USD 14.17 billion by 2033, exhibiting a CAGR of 6% during the forecast period (2025-2033).

Formaldehyde is a colorless, combustible chemical with a potent odor commonly utilized in residential construction materials. It is a preservative in medical laboratories, mortuaries, and several consumer items, including certain hair smoothing and straightening formulations. It is a by-product of car combustion and is generated in minimal quantities by most living creatures, including humans. It is a crucial raw ingredient in industrial chemistry, primarily used to produce adhesives and resins. Formaldehyde is typically marketed as an aqueous solution with an approximate concentration of 37%. It is generated mainly through the catalytic conversion of gaseous methanol, utilizing either a silver or metal oxide catalyst.

The global market is witnessing steady growth due to its extensive applications in resins, adhesives, textiles, and disinfectants. The booming construction and automotive sectors drive demand for formaldehyde-based resins, such as urea-formaldehyde and phenol-formaldehyde. Its widespread use in the chemical and healthcare industries also supports market expansion. However, increasing concerns regarding its health and environmental effects have led to stricter regulations, potentially affecting formaldehyde market dynamics.

Current Market Trends

Increased utilization across various sectors

The rising building & construction and automotive industries are expected to drive demand during the forecast period owing to a wide range of applications. It is a key chemical used in the production of resins, such as urea-formaldehyde resins, phenol-formaldehyde resins, and melamine formaldehyde, which are widely used in the production of building materials, such as particleboard, plywood, and insulation. The building and construction industry is growing faster in various regions.

• The construction industry is the largest consumer, using 60-70% of formaldehyde in the U.S. Implementing formaldehyde detection strategies is crucial, given that formaldehyde is converted to other compounds in a diverse range of products before its end use.

Formaldehyde Market Growth Drivers

Increasing demand for the pharmaceutical and cosmetics industry

The increasing demand in the pharmaceutical and cosmetics industries is driven by its essential role as a preservative and disinfectant. In pharmaceuticals, formaldehyde is crucial for ensuring the stability and longevity of vaccines and other medical products. It is used in cosmetics to enhance the shelf life and prevent microbial growth in products like shampoos, lotions, and nail polishes. This growing reliance on formaldehyde is fueling its demand across both sectors.

• A market surveillance study by the European Network of Official Cosmetics Control Laboratories (OCCLs) found formaldehyde in approximately 30% of the products tested. The data obtained by OCCLs on almost 1,000 products sampled showed good compliance concerning formaldehyde.

Heightened focus on sustainability

As industries and consumers become more environmentally conscious, there is a growing preference for low-emission and eco-friendly products. Manufacturers respond to this trend by developing sustainable alternatives and formulations that meet stringent environmental regulations while maintaining product performance.

• For example, in April 2024, according to TheRoundUp.org, a US-based website dedicated to guides to sustainable living the easy way, sustainable products now hold a 17% market share and account for 32% of growth, growing 2.7 times faster than non-sustainable alternatives. Sustainability is crucial to 78% of consumers, with 62% frequently choosing products based on eco-friendliness.
• Additionally, 55% are willing to pay a premium for eco-friendly brands. Therefore, the rise in focus on sustainability will drive the demand in the market.

Restraining Factors

Health and environmental concerns associated with the product limit market growth

Formaldehyde is a gas at room temperature and is classified as a carcinogen. Prolonged exposure to it can lead to serious health issues, including respiratory diseases and cancer. These concerns have led to stringent regulations and standards for the production and use of products in different industries. Compliance with these regulations requires technological modification in the manufacturing process and product formulations, which are expensive and affect profitability. Consequently, various end-use industries are opting for alternatives to comply with the environmental regulations and standards, which is anticipated to limit the formaldehyde market growth.

• For example, a formaldehyde risk assessment is presently underway per the Toxic Substances Control Act (TSCA). Formaldehyde poses an excessive risk to human health, according to a draft TSCA risk review published by the EPA in March 2024. Nevertheless, the EPA identified some reasons for uncertainty in its findings and pointed out that these hazards could not be applied to everyone, everywhere.

Market Opportunity

High growth of the automotive and construction industries

The expansion of the automotive and construction industries offers a significant opportunity, a crucial component in producing resins, adhesives, and insulation materials. The increasing demand for durable, lightweight, and high-performance materials in these sectors has further amplified the role of formaldehyde in manufacturing processes. Due to its versatility, formaldehyde-based resins are widely used in automotive parts, engineered wood products, furniture, and industrial applications, enhancing efficiency and durability across multiple industries.

With rapid urbanization and infrastructure development, particularly in emerging economies, the global market is expected to witness sustained growth. The push towards energy-efficient construction materials and stringent environmental regulations also drives innovation in formaldehyde-based products to meet sustainability standards.

• For instance, according to Oxford Economics, global construction work is projected to increase by over USD 4.2 trillion in the next 15 years. The volume of construction output is expected to grow by 85% by 2030, highlighting the strong demand for formaldehyde-based materials in the construction sector.

Furthermore, advancements in automotive manufacturing, including the growing adoption of electric vehicles (EVs), have created a need for high-performance composite materials. Formaldehyde resins, known for their excellent thermal stability and mechanical strength, are increasingly essential in producing vehicle components, interior trims, and coatings. As automobile manufacturers aim to enhance vehicle performance while reducing overall weight, formaldehyde-based solutions remain critical in modern vehicle design.

Regional Insights

North America: Dominant region with robust market share

North America holds the largest share of the global market due to the region's strong demand across various industries such as construction, automotive, and pharmaceuticals. The widespread use of formaldehyde-based resins in producing building materials, such as plywood and MDF, drives growth. Furthermore, North America's well-established infrastructure, high demand for high-performance chemicals, and advanced manufacturing capabilities contribute to its dominance. Stringent regulations and sustainability initiatives also push for more efficient and safer applications. The presence of market players and continuous technological advancements solidify North America’s leading position in the market.

Asia-Pacific: Rapid expansion driven by rapid industrialization, urbanization, and increasing infrastructure development

Asia-Pacific is the fastest-growing region for the global market, driven by rapid industrialization, urbanization, and increasing infrastructure development across countries like China and India.

• The oil and gas industry is one of India's eight core industries. India is the third-largest consumer of oil and energy and the fourth-largest importer of liquified natural gas globally. According to the India Brand Equity Foundation, the country's oil demand is projected to double the current demand figures, reaching 11 million barrels per day by 2045. On the other hand, natural gas consumption is projected to grow by 25 billion cubic meters (BCM), following an annual average growth rate of 9% till 2024.

The growing demand for formaldehyde in resins, adhesives, and composite materials fuels market expansion. Additionally, the automotive and textiles industries in the region are booming, increasing consumption. Moreover, Asia Pacific’s large and diverse chemical production base and significant investments in research and development contribute to its rapid market growth.

Countries Insights

• India: The increasing infrastructural activities in India and government-backed policies favoring the manufacturing sector are expected to bolster demand further. In September 2024, Kanoria Chemicals & Industries completed an expansion of its formaldehyde production capacity at Ankleshwar, Gujarat, with an investment of Rs. 56.06 crore (USD 66.955 million). This expansion caters to the growing demand across multiple industries, including automotive, construction, agriculture, cosmetics, and chemicals.
• Canada: In December 2024, Canada introduced amendments to the Formaldehyde Emissions from Composite Wood Products Regulations (SOR/2024-256) under the Canadian Environmental Protection Act, 1999 (CEPA). This regulatory update strengthens emissions control and aligns Canada with international sustainability and health safety standards. The amendments are expected to drive innovation in low-emission formaldehyde-based products, benefitting construction, furniture, and cabinetry manufacturing industries.
• Germany: Germany’s robust automotive and manufacturing sectors, coupled with its stringent regulatory framework, are pushing companies to adopt low-emission and sustainable formaldehyde-based solutions, fostering market growth. In July 2023, the European Union (EU) issued Regulation (EU) 2023/1464 to regulate formaldehyde and formaldehyde-releasing substances in consumer products. This regulation, which applies to all EU member states, including Germany, will be implemented in phases beginning August 2026.
• China: China remains dominant globally due to its massive industrial and manufacturing base. With the government's emphasis on industrial growth and environmental sustainability, investments in low-emission production technologies are rising. In August 2023, Celanese Corporation partnered with Lanzhou Huate Chemical Co. Ltd. to establish a new formaldehyde production facility. This collaboration aims to meet the surging demand for formaldehyde-based resins and adhesives in China's construction, automotive, and electronics sectors.
• United States: The automotive sector is a key driver for the U.S. formaldehyde market. The steady expansion of the automobile and transportation industries has increased demand for formaldehyde-based resins and coatings, used extensively in engineered wood panels, interior components, and under-the-hood applications. In October 2023, MarkLines, a Japan-based automotive research firm, reported that new vehicle sales in the U.S. reached 1,211,141 units, reflecting a 2.0% year-on-year increase compared to October 2022.
• Japan: Japan's aging population and expanding healthcare sector fuel demand for formaldehyde-based medical and pharmaceutical applications. The growing healthcare industry, driven by increasing chronic and lifestyle diseases, has led to the rising adoption of formaldehyde-based sterilization agents and medical-grade polymers in hospitals and pharmaceutical production. According to a 2023 report by the National Institute of Population and Social Security Research, Japan's 65-and-above demographic represents 30% of the total population and is expected to reach 40% by 2050.
• Sweden: Sweden’s focus on eco-friendly and low-emission solutions encourages innovation in sustainable formaldehyde derivatives, boosting long-term market prospects. In December 2022, Johnson Matthey plc announced an expansion of its formaldehyde production facility in Perstorp, Sweden, in response to rising demand. This expansion is expected to increase production capacity by 50%, supporting growing industrial coatings, automotive, and chemical processing applications. 

Formaldehyde Market Segmentation Analysis

By Derivative Type

Urea Formaldehyde (UF) segment dominated the market with the most significant market revenue. Urea-formaldehyde (UF) improves textile fabrics' wrinkle and shrink resistance. Additionally, it plays an essential role in agriculture as a primary source of nitrogen fertilizers. In the construction industry, UF serves as a key adhesive and insulating agent, which is expected to drive growth in the UF segment within the market in the coming forecast period.

Source: Straits Research 

By End User

Steam reforming segment captures the largest formaldehyde market share. Formaldehyde-based resins find widespread use in producing composite and engineered wood products, serving various applications in household furnishings and structural elements. These include moldings, furniture, countertops, cabinetry, support beams, flooring, shelving, stairs, wall sheathing, and trusses. According to the Ministry of Housing and Urban-Rural Development projections, China's construction sector will continue contributing 6% of the country's GDP until 2025. In response to these forecasts, the Chinese government unveiled a five-year plan in January 2022 that prioritized improving the building industry's quality and sustainability. This strategic initiative aligns with the changing Chinese construction industry.

Company Market Share

The market is fragmented due to numerous global and regional industry players. This fragmentation is driven by the widespread use of formaldehyde in construction, automotive, and healthcare sectors, where local manufacturers cater to specific regional demands. The market is characterized by a mix of large multinational corporations and smaller regional producers, leading to intense competition. Additionally, the diverse applications of formaldehyde and regulatory and environmental concerns further contribute to this fragmentation as different companies innovate and adapt to evolving market needs.

BASF SE: An Emerging Player in the Market

BASF SE is a chemical company. It offers chemicals, plastics, crop protection products, and performance products. Its product line comprises solvents, adhesives, surfactants, fuel additives, electronic chemicals, pigments, paints, food additives, fungicides, and herbicides. BASF SE also offers formaldehyde and formaldehyde-free products; formaldehyde products include Formaldehyde 49-2015. The company serves various industries, including agriculture, electronics and electrical, construction, furniture and wood, paints and coatings, automotive, home care, nutrition, chemicals, etc. BASF conducts research and development (R&D) in alliance with global customers, scientists, and partners. The company operates through a network of manufacturing facilities across the world. It is in Europe, Asia Pacific, South America, Africa, the Middle East and North America.

Recent Developments

• September 2024- Kanoria Chemicals & Industries Limited, an India-based chemical manufacturer, opened a new formaldehyde plant in Ankleshwar, Gujarat, with a production capacity of 345 metric tons per day (MTPD), bringing the company's total output to 763 MTPD.

Analyst Opinion

As per our analyst, the global formaldehyde market is set for substantial growth and is driven by rapid industrialization, rising construction activities, and technological advancements in the automotive and healthcare sectors. While regulatory measures in various regions promote safer, low-emission formaldehyde products, the market thrives on innovation and industry-driven demand. Companies focus on eco-friendly production processes and alternatives to address these challenges and meet sustainability requirements.

Additionally, emerging economies like India and China are witnessing capacity expansions and strategic investments, whereas North America and Europe focus on regulatory compliance and sustainable product development. With continuous advancements and market-driven policies, formaldehyde remains critical in industrial and commercial applications worldwide.