China Drives Growth of Global PU Market

By Zhang Yue, China National Chemical Information Center

China is the top PU consumer

China’s consumption of polyurethane (PU) reached 7.8 million tons in 2012, accounting for 40% of the world total, and the proportion was only 9% in 2000. China produces 30% of the world’s PU raw materials, 30% of the PU foam, 60% of the spandex and 40% of the PU elastomers, and has become the main force in the growth of the global PU market.
China’s capacity to make major PU raw materials reached 5.64 million t/a in 2012, accounting for 30% of the world total. Of that, the capacity to produce toluene diisocyanate (TDI) was 790 thousand t/a, accounting for 31% of the world total and ranking first in the world, the capacity to make diphenylmethane diisocyanate (MDI) was 1.79 million t/a, accounting for 28% of the global total and ranking second in the world, after the European Union, and the capacity of polyether polyol (PPG) was 3.06 million t/a, accounting for 34% of the world total and ranking the first in the world. Before 2012, China’s supply of PU raw material isocyanate mainly depended on imports, and the nation’s dependence on imported isocyanate was around 70% in 2005. China’s dependence on imported isocyanate reduced to 10% in 2011 and was only 1% in 2012, and China became a net exporter of TDI for the first time. With the gradual elimination of backward production capacity in the international market and the constant startup of newly added capacity in China, it is expected that China’s export of TDI will increase year-on-year.
China’s consumption of PU was only 920 thousand tons in 2000, accounting for 9% of the world total. It climbed to 3.0 million tons in 2005, accounting for 22% of the global total, up 13 percentage points compared with that in 2000. China’s consumption of PU reached 7.8 million tons in 2012, accounting for 40% of the world total, up 18 percentage points compared with that in 2005, and China became the largest PU consumer in the world.

Urgent need to adjust the industrial structure and explore the international market

In recent ten years, China’s PU industry has faster than its GDP. However, the rapid growth has also caused problems the PU industry – especially in downstream product sectors – such as scattered industrial structure, low concentration, backward technology and equipment, small production scale and weak independent innovation ability in a large number of small and medium enterprises, as well as excess capacity of some PU related products. The above reasons have caused poor quality of many products, low efficiency, high energy consumption and serious pollution. Therefore, there is an urgent need to adjust the industrial structure and explore the international market.
PU is a macromolecular compound containing a repeated carbamate group in the main chain. It is a polymer formed by using raw materials including chain extenders or cross linkers like polyisocyanate and PPG or polyester polyol as well as small-molecule polyol, polyamine or water. By changing the varieties and components of raw materials, the morphology and performance of product can be greatly changed, obtaining the final products from soft to rigid. PU products include soft, semi-rigid and rigid foam plastics, elastomers (PU elastomers also include thermoplastic PU elastomers (TPU) and casting PU elastomers (CPU)), paint and coatings, adhesives, sealants, synthetic leather coating resin and elastic fibers, are used in many sectors such as automobile manufacture, refrigerator manufacture, transportation, civil construction, footwear, synthetic leather, fabrics, machinery, petrochemical, mining machinery, aerospace, medical and agriculture.

Polyurethane industry is still in the development stage

The polyurethane industry originated in Germany and has developed rapidly for half a century. PU products were launched in 1930s, and began to develop rapidly in 1950s. The global consumption of PU was 10.0 million tons and around 13.75 million tons, respectively in 2000 and 2005, and reached 19.0 million tons in 2012 with an average annual growth of 4.7% during 2005-2012. It is expected that the demand for PU will reach 23.0 million tons with an average annual growth of 3.9% during 2012-2017. In the future, the growth of the PU markets in North America and Western Europe will slow down, and players in these two regions will focus on innovation. The PU market in Asia has increased rapidly and many multinational chemical companies have transferred their business focus and R&D centers to Asia, even to China.