Urea Formaldehyde Market is Estimated to Witness High Growth Owing to Rising Demand from Construction Industry
Urea formaldehyde, commonly known as uF, is an important synthetic resin used in a variety of wood products such as medium density fiberboard and particle board. It is mainly used as a binding agent and adhesive in the production of engineered wood products. Urea formaldehyde offers properties such as high bond strength, moisture resistance and low production cost. The global urea formaldehyde market is mainly driven by rising construction activities worldwide. Rapid urbanization and increasing spending on infrastructure development in developing countries have boosted the demand for engineered wood products where urea formaldehyde is widely used.
The global urea formaldehyde Market is estimated to be valued at US$ 17521.61 Bn in 2023 and is expected to exhibit a CAGR of 22.% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Rising demand from the construction industry is one of the major drivers of the Global Urea Formaldehyde Market Size. Urbanization and government investments in infrastructure development such as roads, bridges, commercial buildings have significantly increased the demand for wood-based panels in construction applications. According to data from World Bank, the annual growth rate of global construction spending is estimated to be around 3.6% during 2023-2027. This rising construction activities will continue driving the consumption of engineered wood products and subsequently urea formaldehyde resin market during the forecast period.
Stringent regulations regarding formaldehyde emissions is restraining the growth of urea formaldehyde market. Formaldehyde is recognized as a toxic chemical by various regulatory bodies. Growing health concerns associated with formaldehyde exposure have led to imposition of stringent standards regarding its use in wood-based panels and composite wood products. For instance, California Air Resources Board has classified formaldehyde as a toxic air contaminant. Such stringent norms are necessitating manufacturers to shift towards formaldehyde-free alternatives, thereby hampering the demand for urea formaldehyde resins.
SWOT Analysis
Strength: The urea formaldehyde market has high demand from construction and furniture industries. It has low cost of production and higher strength properties than other resins. its adhesive and binding properties make it suitable for manufacturing of particleboards and fiberboards.
Weakness: Urea formaldehyde emits toxic and carcinogenic formaldehyde fumes. Prolonged exposure to these fumes can cause various health issues. It is not suitable for exterior applications as it degrades with exposure to weathering.
Opportunity: Growing construction industry in developing economies of Asia Pacific and Latin America is augmenting demand for wood panel boards where urea formaldehyde is used. Development of low emitting urea formaldehyde resins can expand its application scope.
Threats: Stringent regulations over formaldehyde emissions can restrict market growth. Substitutes like melamine urea formaldehyde and phenol formaldehyde resins posing competition due to their lower emissions and superior water resistance.
Key Takeaways
The global urea formaldehyde market is expected to witness high growth.
Regional analysis: Asia Pacific dominates the market currently owing to high consumption in construction industry of China, India, Japan and other developing economies. The market in the region is projected to grow at fastest pace during the forecast period.
Key players operating in the urea formaldehyde market are Taiwan Semiconductor Manufacturing Company, Ltd., MonolithIC 3D Inc., XILINX, Inc., Elpida Memory, Inc. (Micron Technology, Inc.), The 3M Company, Ziptronix, Inc., STATS ChipPAC Ltd., United Microelectronics Corporation, and Tezzaron Semiconductor Corporation. They are focused on developing low emitting urea formaldehyde resins to comply with stringent regulations.
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