Global Formic Acid market - 2023-2030

Global Formic Acid market - 2023-2030

Global Formic Acid Market reached US$ 1.1 billion in 2022 and is expected to reach US$ 1.4 billion by 2030, growing with a CAGR of 3.7% during the forecast period 2023-2030.

A crucial component of the chemical industry, formic acid is used to create a wide range of goods, such as pigments, medicines and solvents. The development of these sectors helps to partially meet the rising demand for formic acid. Formic acid is considered to be more environmentally friendly than several other substances. For situations where it could be a more sustainable substitute, formic acid is growing in popularity.

The agriculture industry uses formic acid. The agriculture industry uses formic acid. For an antibiotic and preservative in animal feed, chemical formic acid is vital for maintaining the health and increasing the growth of animals. Consumption of food products is rising as the world's population increases, leading to a need for improved and more productive methods of agriculture, which in turn increases the demand for formic acid.

Asia-Pacific is among the growing regions in the global formic acid market covering more than 1/3rd of the market and Asia-Pacific is located in multiple of the world's largest agricultural economies, such as China and India. Animal feed preservatives and pesticides like formic acid are frequently utilized in agriculture. The necessity for more food production and the expansion of agriculture has pushed formic acid demand in the area.

Dynamics

Increasing Use as a Pharmaceutical Intermediate

In medicine, the use of formic acid with an 85% concentration is a successful, cost-effective and safe treatment option for common warts with few adverse effects and high compliance. As a result, formic acid serves as a pharmaceutical intermediary in the production of several drugs, including amidopyrin, vitamin B and others. The global outbreak of measles is driving up demand for amidopyrin medications.

According to the latest UNICEF data, there was an increase in measles cases globally in the initial two months of 2022 compared to the same time in 2021. The Centres for Disease Control and Prevention also forecasted that in 2021, there will be, 5,760, 5,613 and 4,178 cases of measles in Somalia, Nigeria and India.

As a result, there is a rising demand for pharmaceutical intermediates to address the heightened requirement for medications like amidopyrin, vitamin B and others. Formic acid consumption is anticipated to increase as a result, which will fuel market expansion in the approaching years.

Expanding Leather and Textile Industries

Formic acid is employed in dyeing, tanning and other processes because of these characteristics. It is therefore perfect for the leather and textile industries. The expansion of the textile and leather industries is being aided by elements including rising foreign investment in the textile sector and the construction of new textile and leather production facilities.

For instance, the Mongla Export Processing Zone (EPZ) in Bangladesh will soon have a garment manufacturing industry thanks to an investment of US$ 12.89 million from the China-owned business Xihe Textile Technology Bangladesh Limited. The project will be finished in its development by 2023.

According to the Confederation of National Associations of Tanners and Dressers of the European Community, the European Union also controls around 56% of the world's leather tanning market. Because of the increasing leather and textile sectors, the formic acid industry is growing.

Variable Raw Material Costs

The market for formic acid is certainly extremely limited by the volatility of raw material costs. The production of formic acid typically involves the methanol carbonylation process, where methanol and carbon monoxide serve as the primary raw materials. The cost of certain essential components can significantly impact the overall production expenses of formic acid.

Rising raw material costs can put pressure on formic acid producers to maintain competitive prices, which might therefore have an impact on their profit margins. The price sensitivity to changes in raw material prices highlights how crucial supply chain management and cost-cutting tactics are in the formic acid sector.

Stringent Regulations

The regulation that limits its usage is limiting the industry's expansion, even though formic acid has controlled the market for many of its alternatives. For instance, formic acid is a chemical that is corrosive and when it comes into contact with the eyes, lungs and other organs, it may cause serious health issues. In addition, this substance can cause severe skin burns and eye damage, according to the CLP00 harmonized classification and labeling system for the European Union.

Additionally, this substance is categorized as being dangerous if eaten, toxic if breathed, damaging to organs, combustible and causing significant eye damage by companies in their REACH registrations. If mixed with sulfuric acid, formic acid is a very deadly cause of carbon monoxide poisoning. Therefore, these limitations are restricting the market's expansion for formic acid.

Segment Analysis

The global formic acid market is segmented based on grade, production method, application, end-user and region.

Increasing Demand for Formic Acid in Agriculture due to Rising Agriculture Productivity

The agriculture segment is among the growing regions in the global formic acid market covering more than 1/3rd of the market. The efficiency of pesticides against pests is increased when formic acid and oxalic acid are combined. The results in effective crop protection, the preservation of animal feed and other advantages. Formic acid is commonly applied in agriculture as a result of these characteristics.

The expansion of the agriculture business depends on several variables, including the prohibition of antibiotics that promote growth in animal feed, rising agricultural productivity and others. For instance, the use of antibiotics that promote animal development in feed has been outlawed in several North American and European nations, including U.S., UK and others.

Additionally, the OECD-FOA Agriculture Forecast predicts that global agricultural production will reach 304,403.61 Tons by 2026. In order to conserve the feedstock for a long time, the use of organic compounds will rise due to the prohibitions and anticipated increases in agricultural output. The is expected to increase formic acid consumption, which would speed up market expansion in the future years.

Geographical Penetration

Expanding Demand for Formic Acid in Leather and Textile Sectors in Asia-Pacific

Asia-Pacific has had a major impact on the globally formic acid market because of very closely connected industries like leather, textiles and others to the region's economic growth. The growing textile industry of the region is expected to improve the market share of formic share up to 43.4% in the forecast period. Additionally, the Asia-Pacific agriculture industry is growing, mostly as an outcome of developments in food preservation methods aimed at improving food security as well as other contributing factors.

For instance, the output of food crops increased noticeably in the Asia-Pacific area between 2020 and 2021. The U.S. Department of Agriculture's statistics show this period experienced a large increase in the overall output of food crops. As opposed to the previous record of almost 998.8 million metric Tons, the output increased by more than 1026.7 million metric Tons or 2.8%. According to data from U.S. Department of Agriculture, there were 95,619 thousand cattle in China as of 2021, a 4.6% rise from the 91,380 thousand cattle there in 2016.

In 2011, there were 53,000 thousand beef cows in China as an entire nation. By 2021, there would be 53,400 thousand, a minor increase of about 1%. The Asia-Pacific's expanding livestock and agricultural industries are hence driving up formic acid consumption. Formic acid market growth is thus being accelerated by technology.

For instance, in July 2022, in an effort to greatly increase the region's production capacity, AB Agri developed a new 240-kilo-ton feed mill in Tongchuan City, Shaanxi Province, China. The second-largest factory in AB Agri China, the new 34,000 sq m facility has distinct manufacturing lines for swine and ruminant feeds.

COVID-19 Impact Analysis

The pandemic affected international supply systems, especially those in the chemical sector. Formic acid and associated compounds were produced and transported with delays as a result of lockdowns, travel restrictions and temporary facility shutdowns in several nations. The availability of formic acid for many sectors was impacted by the supply chain disruption, which led to shortages of supplies and logistical difficulties.

Demand changes for formic acid were also brought on by the epidemic. Due to lockdowns and lower consumer spending, certain formic acid-using businesses, such as leather and textiles, witnessed a decline in demand; however, other industries, like medicines and agriculture, reported a rise in demand.

For example, formic acid is used in the production of disinfectants and sanitizers, both of which were in high demand during the pandemic. The alteration in demand patterns compelled manufacturers to alter their manufacturing strategies. Price volatility in the formic acid market was caused by the disruption of supply systems and changing demand.

Formic acid and related chemicals' prices have occasionally gone up as a result of production cost increases and supply constraints. But as the pandemic spread, market dynamics changed and prices changed in response to shifting conditions of supply and demand. To negotiate these pricing swings, businesses across a range of industries had to carefully manage their procurement practices.

Russia-Ukraine War Impact Analysis

The supply chain for agricultural products may be affected by the situation in Ukraine, a large agricultural producer. Formic acid is employed in agriculture for several functions, including crop protection and the preservation of feed. Any disturbances in the agriculture industry may have an impact on formic acid consumption in a secondary way.

Additionally, if the conflict caused supply chain interruptions or economic penalties against Russia, a significant chemical manufacturer, it may affect the availability and cost of chemicals like formic acid on the international market. Market volatility for commodities is frequently caused by geopolitical turmoil.

Chemical formic acid is used in many industrial processes, such as the tanning of leather, the production of textiles and the production of chemicals. The price of producing formic acid may be impacted by sudden changes in the price of raw materials or energy sources brought on by geopolitical conflicts. The pricing and profitability of goods in sectors that use formic acid may be impacted by these price swings, which may change the dynamics of supply and demand.

By Grade
• Less than 80% to 89.5%
• 89.5% to 90.5%
• 91.6% to 99%
• Above 99%

By Production Method
• Carbonylation of Methanol
• Hydrolysis of Methyl Formate

By Application
• Leather Tanning
• Animal Feed & Silage Additives
• Pharmaceutical Intermediate
• Cleaning Agents
• Preservatives
• Dyeing
• Latex
• Others

By End-User
• Agriculture
• Leather
• Textile and Apparels
• Healthcare
Amidopyrin
Vitamin B
Others
• Rubber
• Chemical
Methanamide
Diethyl Formamide
Others
• Paper
• Others

By Region
• North America
U.S.
Canada
Mexico
• Europe
Germany
UK
France
Italy
Russia
Rest of Europe
• South America
Brazil
Argentina
Rest of South America
• Asia-Pacific
China
India
Japan
Australia
Rest of Asia-Pacific
• Middle East and Africa

Key Developments
• On May 1, 2023, Indian Institute of Technology Guwahati researchers developed a catalyst that can release hydrogen gas from wood alcohol without producing any more carbon dioxide as a byproduct. The procedure yields formic acid, an important industrial chemical in addition to being simple and safe for the environment. As a result of this progress, methanol is a promising ""Liquid Organic Hydrogen Carrier"" (LOHC) and helps advance the idea of a hydrogen-methanol economy.
• On July 13, 2022, Ingenza, a biotechnology company and Johnson Matthey are working in collaboration to manufacture formic acid from acquired industrial CO2 emissions for application in a variety of sectors, including agriculture and the pharmaceutical industry, as well as a possible feedstock for other bioprocesses. A useful chemical called formic acid, the most basic carboxylic acid, may be created by catalytically hydrogenating CO2. However, due to CO2's high degree of stability, activation barriers must be surmounted with a lot of energy.
• On November 10, 2020, BASF increased the cost of formic acid and propionic acid. The price of formic acid in North America will increase by US$ 0.05 per pound.

Competitive Landscape

The major global players in the market include BASF SE, Eastman Chemical Company, Gujarat Narmada Valley Fertilizers & Chemicals Limited, Luxi Chemical Group Co Ltd., Perstorp Holdings AB. PT Sintas Kurama Perdana, Thermo Fisher Scientific, Spectrum Chemical Mfg. Corp., Lanxess AG and Alfa Chemistry .

Why Purchase the Report?
• To visualize the global formic acid market segmentation based on grade, production method, application, end-user and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of formic acid market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Grade mapping available as Excel consisting of key Grades of all the major players.

The global formic acid market report would provide approximately 69 tables, 76 figures and 201 Pages.

Target Audience 2023
• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies