Status and Outlook for China's Polyurethane Industry   

By Zhang Yue, China National Chemical Information Center

Polyurethane (PU) is widely used for the manufacture of high-resilience foam seats, rigid foam insulation panels, microcellular foam seals and gaskets, durable elastomeric wheels and tires, automotive suspension bushings, electrical potting compounds, high-performance adhesives, surface coatings and surface sealants, synthetic fibers (e.g. Spandex), carpet underlay, and hard-plastic parts (e.g. for electronic instruments).

1  Evolution of China's PU Industry

China started to produce PU in the late 1950s. In 1963, Jiangsu Research Institute of Chemical Industry, Nanjing University Department of Chemistry and Nanjing Plastic Factory jointly developed a one-step polyether-type PU foam production process. In 1966, they built a plant for the production of flexible PU foam. China began to develop rigid PU foam in 1964. But it was not until the mid-1970s that China built a small-scale industrial facility to produce it. In the 1980s, from Japan, Italy and other countries, China imported technology and equipment for the production of polyether polyols and isocyanates (both are raw materials of PU) as well as flexible PU foam. Since then, China's PU production has developed rapidly, with an annual growth rate of more than 20%, much higher than that of China's GDP. But the production still cannot meet the huge domestic market demand. The output of PU in China was about 1.6 million tons in 2002. It surged to 3 million tons in 2005, including about 550 000 tons of rigid foam and 600 000 tons of flexible foam. In 2010, it reached 6.04 million tons, including about 1.15 million tons of rigid foam and 1.27 million tons of flexible foam.

2  Production of PU in China from 2005 to 2015

China has become a major PU producer and a major driver of the global PU market's growth. Even when the world's major PU markets shrank drastically in the peak of the global financial crisis during 2008-2009, both the output and sales of PU in China increased remarkably. In 2010, the output of PU products in China was around 6 043 000 tons, up 10% year on year. Its average annual growth rate from 2005 to 2010 was around 15%, much higher than that of China's GDP.
   The PU industry is regarded as a key strategic emerging industry in China. The 12th Five-Year Development Planning of China's PU Industry proposes that the overall development targets of the industry are: (1) make its production technology and product quality of basic raw materials, accessory ingredients and major products meet or approach international standards through independent technological innovations; (2)  accelerate the process of restructuring the industry, increase the proportion of high-end products, eliminate obsolete production capacity, and initially establish an environmentally friendly, low-carbon and high-efficiency PU material industrial system with a rational layout; and (3) by the end of 2015, China's PU production capacity should reach 9 million  to 10 million t/a, and the output value should reach RMB270-300 billion, both ranking first in the world.
   The supply of PU products in China from 2005 to 2010 and their projections to 2015 are shown in Table 1.
          
Table 1  Supply of PU products in China from 2005 to 2010 and their projections to 2015  (thousand tons)
Year    Flexible foam    Rigid foam    PU synthetic leather*    PU fiber    PU coatings*    Others    Total
2005    600    550    650    160    350    690    3000
2006    731    751    958    152    643    758    3993
2007    755    814    1141    192    800    833    4535
2008    930    940    1179    185    820    869    4923
2009    1050    1048    1276    228    900    985    5487
2010    1270    1150    1320    263    950    1090    6043
2011E    1390    1310    1460    290    1030    1190    6670
2015E    2000    2200    2200    450    1400    1750    10000
Note: * include solvent.


3  Major producers and capacity distribution

PU products mainly include PU foam, elastomers, fibers (Spandex), PU synthetic leather, shoe resin, PU coatings, PU adhesives, PU paving materials, and PU waterproofing materials. There are a large number of PU producers in China. Their production facilities are quite scattered - in other words, the concentration of the industry is quite low. Major PU producers in China are listed in Table 2.

Table 2 Major PU producers in China
Producer    Plant location    Product    Capacity (kt/a)
Xinxiang Xinyuan Chemical Co Ltd    North China (Henan)    Flexible PU foam    50
Chiao Fu Group    Shanghai and Guangdong    Flexible PU foam    20
Nantong Xinyuan Foam Company    East China (Jiangsu)    Flexible PU foam    10
SINOMAX    Central & South China (Guangdong)    Flexible PU foam    10
Lianda Group (Hongkong) Co Ltd    East China (Shanghai) and Guangdong    Flexible PU foam    10
Qingdao Xinyutian Chemical Co Ltd    East China (Shandong) and Guangdong    PU resin for synthetic leather and elastomers     300
Huafeng Group    East China (Shanghai, Zhejiang), Central & South China (Fujiang), Northeast China (Liaoning) and Southwest China  (Sichuan)    PU resin for synthetic leather, Spandex and elastomers    220
Jiangsu Defa Resin Co Ltd    East China (Jiangsu)    PU resin for synthetic leather and Shoes    170
INVISTA    East China (Shanghai) and Central & South China (Guangdong)    Spandex    58
Hyosung Group    East China (Zhejiang) and Central & South China (Guangdong)     Spandex    39
Yantai Spandex Co Ltd    East China (Yantai)    Spandex     34

   PU foam: There are many PU foam producers, and several dozen of t