Formic Acid MarketBy Li YaliFormic acid is an important organic chemical raw material. It can be used in the synthesis of pharmaceuticals, pesticides, dyestuffs, assistants and other organic intermediates.    The total capacity of formic acid in the world has reached 620 thousand t/a today. It is mainly distributed in Europe. Formic acid will have a bright application prospect in Asia in the next few years. Bright market prospect in AsiaThere are 4 major formic acid producers in the world. Except BP of Britain that uses the light oil liquid-phase oxidation process, all the other 3 producers use the methyl formate hydrolysis process.    The sector with the greatest consumption of formic acid in the world is the leather industry. The consumption in agriculture holds the second place. There is a surplus capacity of formic acid in Europe, Africa and the Middle East and formic acid produced in these regions is mainly exported to America and the Asia-Pacific region. The demand of formic acid in the world was 430 thousand - 450 thousand tons in 2004 and the average annual demand growth is 2% - 3%. The EU will forbid the use of OTC (over the counter) feed antibiotics from 2006 and the average annual growth of the formic acid demand in feed additives can therefore reach 8% - 10% in Europe. Formic acid has a very bright application prospect in Asia. Formic acid in Asia is mainly used as coagulating agent for natural rubber today. It is expected that the demand of formic acid in the feed sector will also increase considerably in Asia in future. Rapid export growth in ChinaChina started the formic acid production in 1989. There are more than 60 producers with a total capacity of around 240 thousand t/a in 2006. Shandong Feicheng Acid Chemical Co., Ltd. (60 thousand t/a), BASF-YPC Co., Ltd. (50 thousand t/a), Jinan Chemical Plant (20 thousand t/a) and Xinanjiang Chemical Plant (10 thousand t/a) use the methyl formate hydrolysis process. All the other producers use the sodium formate process with great energy consumption and low production level. The demand of formic acid in China is around 150 thousand tons.   80% of formic acid exported by China is to Southeast Asia and 12% is to Europe. The export amount of formic acid has increased rapidly in recent years. It reached 27.3 thousand tons in 2005, an increase of 93.6% over 2004. Shandong Feicheng Acid Chemical Co., Ltd. is one of the biggest formic acid producers in Asia and the amount of formic acid exported by the company accounts for more than 85% of the national total export amount.    China has also made progress in the research and development of formic acid production technology. After Shandong Feicheng Acid Chemical Co., Ltd. introduced the methyl formate hydrolysis process from Acid-Amine Technologies Inc. of the United States, it has achieved the localization of catalysts through constant improvements and acquired production technology with intellectual property right. Shandong Luxi Chemical Co., Ltd., another chemical fertilizer producer also located in Feicheng, Shandong province plans to launch a 20 thousand t/a formic acid project.    Some foreign companies have shifted their formic acid production to China in recent years. For example, BASF has constructed a 50 thousand t/a formic acid unit in Nanjing with Chinese partners. Small formic acid units using the sodium formate process will gradually phase out of the picture in China.
Major Formic Acid Producers in the World
       thousand t/a
Producer                Capacity
BASF of Germany                 193
Techmashimpor of Russia         80
Kemira of Finland               80
BP of Britain                   65
Source: CNCIC Chemdata