Potassium Formate Market size is forecast to reach $779.5 million by 2026, after growing at a CAGR of 2.8% during 2021-2026. Potassium formate (HCO2K), is the potassium salt of formic acid. In high-pressure high temperature (HPHT) oil wells, potassium formate brines are extensively utilized in drilling, as these are environmentally friendly and enhance polymer stability. There is a continued preference for potassium formate over other salts, for application in oilfield, de-icing, heat transfer fluid, and hydrate inhibition which is anticipated to support the potassium formate industry growth. De-icers at airports and local customers are increasingly transitioning to cost-effective goods that are less harmful to the environment. This is projected to substantially drive the potassium formate industry. Furthermore, the rapid growth of the oil & gas industry has increased the demand for oilfield fluids; thereby, fueling the overall market growth during the forecast period.
The COVID-19 pandemic has severely harmed the world’s economy, putting a stop to the manufacturing process and hampering the worldwide trade cycle. Therefore, as companies were unable to satisfy the demand, the potassium format market was also hindered. Potassium formate has one of the most significant uses in the oil and gas industry; however, the functioning of the oil and gas industries was moderately hindered due to the lockdown. For instance, According to the Drilling Productivity Report Supplement published by the U.S. Energy Information Administration, in the first half of 2020, U.S. crude oil production shrank sharply. In April, it declined by 5.8% month over month and 16.6% in May. With the decrease in the drilling operation, the demand for oilfield fluids has significantly fallen, which is having a major impact on the potassium formate industry. This restrains in the oil & gas industry drilling operation eventually restrained the potassium formate market growth during the pandemic.
Potassium Formate Market Segment Analysis – By Form
The liquid segment held the largest share in the potassium formate market in 2020 and is growing at a CAGR of 2.4% during 2021-2026. Potassium brine is a transparent liquid with a superior density and is used significantly in the form of brine. Solid potassium formate is a white crystal clear powder that is hygroscopic in type, but relative to liquid form its use is very narrow. Therefore, the production of liquid potassium formate is more lucrative and generates more revenue-generating opportunities in the industry. Also, potassium formate brine solutions are being produced to clear snow from aircraft surfaces, which are anticipated to be a major opportunity for the potassium formate market growth during the forecast period.
Potassium Formate Market Segment Analysis – By Application
The oilfield fluids segment held the largest share in the potassium formate market in 2020 and is growing at a CAGR of 2.7% during 2021-2026. Potassium formate is extensively used in oilfield fluids and is being more popular due to its compatibility and favourable properties. Traditional salts are being replaced by potassium formate in the oilfield application as potassium formate clear brines are environment-friendly and are biodegradable, which makes them suitable vis-à-vis halide-based fluids. Also, potassium formate fluids are considered as one of the most efficient drilling fluids in petroleum industries, especially in shale to minimize the drilling inefficiencies during operational performances. The mixture of sodium-potassium has the highest shale recovery (approximately 95%). Thus, these extensive properties make potassium formate suitable for oilfield fluid applications, owing to which it is the largest and fastest-growing segment under the application segmentation of the market during the forecast period.
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Potassium Formate Market Segment Analysis – By End-Use Industry
The oil & gas segment held the largest share in the potassium formate market in 2020 and is growing at a CAGR of 2.5% during 2021-2026, as it provides high density, which is required for a deep good drilling. Further, it has a higher solubility in water than any other formate and is environmentally safe, which is driving its demand in the oil & gas industry for applications such as drilling fluids, shale stabilization, and more. Since supply continues to surpass demand, the oil & gas industry is going through a phase of a renaissance. In the oil & gas market, the prolonged period of bullishness has also rubbed off on drilling activities across the globe. 2019 has seen a steady rise in drilling operations. For example, according to the U.S. Increases in drilling activity by the Energy Information Administration (EIA) forced U.S. crude oil and natural gas output to set new peaks of 12.2 million barrels per day (b/d) and 111.5 billion cubic feet per day (Bcf/d), respectively, in 2019. Thus, the strong momentum in the oil & gas exploration domain is expected to lead to a steady stream of demand from the oil & gas industry for potassium formate during the forecast period.
Potassium Formate Market Segment Analysis – By Geography
Europe region held the largest share in the potassium formate market in 2020 up to 42%, owing to the high demand for potassium formate in the oil & gas industry and as a de-icing agent. According to the BP Statistical Review of World Energy, the oil refinery throughput increased from 12,666 thousand barrels daily in 2016 to 12,740 thousand barrels in 2019. The demand for potassium formate is projected to rise at a sluggish pace in Europe owing to the increasing oil refinery activities, which is substantially increasing the demand for potassium formate as oilfield fluids. Furthermore, the stringent regulations of the aerospace industry enforcing sustainable and environment-friendly solutions for de-icing in Europe have led to potassium formate gradually replacing potassium acetate and urea as the preferred de-icing agent on runways. These innovations are also affecting the municipal and commercial industries, with potassium formate-based de-icing solutions being used to reduce the negative effects of road winter de-icing as well. While a complete change towards de-icing agents based on potassium formate is supposed to be incremental, these innovations have led to much greater opportunities for manufacturers on the market for potassium formate, which will then drive the potassium formate market growth in Europe during the forecast period.
Potassium Formate Market Drivers
Growing Demand for Non-hazardous Heat Transfer Fluids
There have been minimal applications of potassium formate as a heat-transfer liquid. However, end-use industries are looking at feasible solutions for heating and cooling processes due to the increasing emphasis on sustainability, and potassium formate is seen as a viable alternative. With a quality premium, producers are now focusing on heat transfer fluids based on potassium formate to be used in refrigerated systems, instead of calcium chloride and other brine solutions. And governments are taking initiative to boost the refrigeration industry to provide access to sustainable cooling. For instance, in March 2019, the Indian government launched the India Cooling Action Plan (ICAP) encompassing inter alia reduction of cooling demand, refrigerant transition, enhancing energy efficiency, and better technology options with a 20-year time horizon. Potassium formate-based refrigerated systems are steadily gaining momentum, with non-toxic and non-hazardous products making their way into the commercial sector in the name of viable technology. Thus, the growing demand for non-hazardous heat transfer fluids brings potassium formate into prominence in the growing refrigeration industry, owing to which the market is likely to grow at a substantial rate during the forecast period.
Growing Demand for Safety, Agility, and Efficacy to Develop Potassium Formate as Durable Agent
The end-use industries are continually under pressure to reduce operating costs, improve efficiency and raise productivity. This strain hits the supply chain in which end-use suppliers are actively engaged in R&D to satisfy customer demand. The prominent requirements created by the end-user are among the divergent needs, protection, agility, and efficacy of the drilling fluids. The growth of smooth fluids and the introduction of high chemical strength are phenomena among the changes that are actively incorporated into the drilling process. In addition, the demand for the former feature includes an improvement in end-user sentiment for hazardous results due to snowfall and that of the latter from ongoing deicing applications at airports. There is a growing demand for the production of potassium formate brine solutions to extract snow from the surface of the aircraft, as they are delicate and stable when handling a wide range of temperatures compared to other alternatives on the market. Thus, the growing demand for potassium formate for different applications is driving the market.
Potassium Formate Market Challenges
Drawbacks Associated With Potassium Formate
Seasonal variations, including low winter snowfall, remain highly affected by the intake amount of potassium formate. The widespread availability of competitively priced potassium formate alternatives will continue to restrict sales to some degree. In addition, the volatility of the prices of raw materials used in the manufacture of potassium formate is another strong factor limiting producers in the demand for potassium formate. Although market stakeholders are facing upward pricing pressure as a result of the tightening supply scenario, a substantial decrease in formic acid consumption observed over the past few years will also continue to be a significant factor with a negative effect on market development.
Potassium Formate Market Landscape
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the potassium Formate market. Major players in the potassium formate market are Perstorp Holdings, ADDCON, SynaTek, BASF SE, ESSECO UK Limited, Chongqing Chuandong Chemical (Group) Co. Ltd., Kemira Oyj, Cabot Corporation, Sinomine Resource Group Co., Ltd., and Nachurs Alpine Solutions Industrial (NASi).
In May 2020, with the launch of AmicultTM K42, Perstorp entered the fertilizer market. Without raising salinity or obstructing foliar and drip irrigation systems, this chloride-free source of potassium has a high solubility and absorption rate.
In February 2019, Sinomine Resource Group acquired the specialty fluids company of Cabot Corporation for $135 million. Cesium formate brines and cesium chemicals are manufactured by the specialty fluids company.
Europe dominates the potassium formate market, owing to the increasing demand for potassium formate from the aerospace industry in the region. According to Boeing Commercial Market Outlook 2020–2039, Europe’s total fleet in 2019 was 5,220, which is forecasted to increase and reach 9,050 by 2039.
Also, there is an increasing demand for efficient de-icing on runways in the aerospace industry and this is likely to boost the market for potassium formats in the projected timeframe.
Potassium formates are being used as a foliar fertilizer in the Sub-Saharan areas where fertilizers are essential to make the soil fertile. Therefore, such applications are anticipated to create immense opportunities for the potassium formate market during the forecast period.
In recent years, however, a decline in the use of formic acid has been noted. Moreover, the market value is also impeded by seasonal demand for potassium formate.
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B. Potassium Citrate Market
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