What drives the price spread between paraformaldehyde and its methanol feedstock in China?

Paraformaldehyde pricing in China is tightly coupled to methanol cost swings, as seen in the H1 2026 performance of major producer Jiangtian Chemical. Methanol stayed stable early in the year, keeping costs manageable, but geopolitical disruptions in March pushed feedstock prices sharply higher, forcing supply contraction. By late June, methanol prices collapsed, removing cost support and deepening buyer caution. Downstream consumers limited purchases to essential volumes, while export inquiries also weakened, compressing margins in a market already crowded with homogeneous product. The result was a traditional chemicals segment growing only 7.47% year-on-year with a thin 11.14% gross margin, versus the company's high-growth SAP business. For buyers, timing purchases around methanol volatility remains the single biggest lever on landed cost.