IAL Consultants is pleased to announce the recent publication of its report on the markets for Polyurethane Chemicals and Products in Asia Pacific.
This new study updates and expands upon the information included in our previous study published in 2023. The information contained within this report is based upon an extensive programme of interviews throughout the industry. The report contains both PU product production and raw material consumption figures, with 2023 as the base year and market forecasts provided till 2028.
The data is also available in a database format for subscribers, enabling the manipulation and output of data.
Market Overview
The total production of polyurethane products in the Asia-Pacific region was 12.94 million tonnes in 2023. This showed an increase of around 1.5% in 2023 after a decline of 5.2% in 2022. The growing construction sector in the region has significantly increased the demand for polyurethane products, including insulation materials, adhesives and sealants. Additionally, the automotive industry in the Asia Pacific region is a major consumer of polyurethane products, utilising them in car seats, dashboards and other interior and exterior components. The rise in vehicle production in countries such as China, India and Japan has further driven the demand for polyurethane.
A CAGR of around 3.5% is expected over the next five years, with the fastest growth in 2023 in India and Indonesia with 9.9% and 7.7%, respectively. On the other hand, Japan and Taiwan have shown a decline in 2023 of around 1.5% and 2%, respectively. In 2023, elastomers were the largest product type, comprising 38% of the total APAC polyurethane output, driven by the significant demand from the synthetic leather, footwear and spandex industries in the region. Following elastomers, flexible foam accounted for 20.5%, and rigid foam made up 19.3% of the output.
China is the largest PU producer in the APAC region, with production of around 9.7 million tonnes and showing a slight growth of around 0.7% in 2023. The stagnation in production was mainly due to the drop in newly started housing area by 20.4% to 953.76 million square metres. According to the National Bureau of Statistics, the residential property sector experienced a notable downturn, with the sales area of commercial buildings declining significantly by 8.5% in 2023 compared to the previous year. In rigid foam construction applications, PU is often being substituted with alternates such as mineral wool board. On the other hand, the production of key items in rigid foam such as refrigerators demonstrated a growth of around 11% in China in 2023.
In 2023, China accounted for ~75% of polyurethane output, despite the challenges it faced in its construction industry. However, this figure has been decreasing annually. India, South Korea and Japan are in second, third and fourth places, with 5.4%. 5.1% and 3.5%, respectively.
The APAC consumption of PMDI and TDI was 2.02 million tonnes and 900,152 tonnes, respectively, in 2023. This represents an annual change of 3.7% for MMDI, 1.56% for PMDI, and -3.46% for TDI compared to 2022.
Flexible Foam
The APAC region produced 2.6 million tonnes of flexible polyurethane foam in 2023, representing a year-on-year decrease of 0.9% from the previous year. This is due to the decrease in China and Pakistan. The largest producer is China, accounting for 57% of regional flexible foam output. India is the second largest producer, with 14%, and the remainder of the industry is quite fragmented. China, Pakistan, Singapore and Sri Lanka were the only countries to exhibit negative growth in 2023, with the largest decline seen in Pakistan of 10%. There was notable growth in Australia and India.
The main product category is conventional polyether slabstock, with production of around 1.10 million tonnes, which is relatively easy to produce and has a wide range of applications. In 2023, the polyether slabstock market experienced a 3.7% decline. Other important categories include viscoelastic foam, HR foam and polyester foam.
In 2023, regional production of flexible moulded foam, including transport and furniture component foam, reached 959,700 tonnes, a 6.6% increase from the previous year. Automotive seating foam, the largest category, grew by 8.4%. However, other transport foam production declined due to a drop in Chinese motorcycle production. The rapid recovery in automobile production, particularly in new energy vehicles, also boosted demand for integral skin foam for instrument panels and steering wheels. Regional vehicle production grew by 10.2% in 2023, despite being hindered by semiconductor chip and raw material shortages.
Rigid Foam
Most demand for PU rigid foam comes from refrigeration applications in Asia-Pacific, although there is also demand from the construction industry. Promotion of energy saving and efficiency for buildings continues to be the major driver for rigid PU foam in the region.
In 2023, the APAC region produced approximately 2.5 million tonnes of rigid polyurethane foam, marking a 2.2% year-on-year increase. Chinese production of rigid foam grew slightly by 1.7%, while Taiwan and Japan saw declines. Conversely, South Korea's production of rigid foam increased by 2.4%.
China is the largest rigid foam producer, accounting for 73% of regional output in 2023. South Korea and India are the second and third largest, respectively. Regional rigid foam production is expected to surpass pre-pandemic levels by the end of the forecast period (2024-2028). China is likely to see modest growth, but not the exponential rates of the past.
Appliances represent the largest category for rigid foam, followed by construction. Domestic refrigeration dominates the appliance category. In construction, the largest applications for PU rigid foam are in rigid-faced panels, pre-insulated pipes and OCF. Production of flexible-faced panels and moulded rigid foam is relatively small in comparison.
In 2023, production and demand for sandwich panels in India increased by 11.8% due to growth in the construction, pharmaceutical and cold-chain storage sectors. India has a relatively large market for rigid-faced panels to meet the rising demand from the refrigeration and construction industries. Rigid-faced panels are extensively used in cold storage, prefabricated houses, warehouses, clean rooms and process plants in India. However, their usage in the residential sector remains comparatively small.
Elastomers
Synthetic polyurethane elastomers can be found in a wide variety of industries, including footwear, textiles, automotive, building and mining, aerospace, electronics, medical devices, sporting goods, and numerous general industries, thanks to their high performance. The footwear and textile industries in Asia-Pacific are the principal consumers of PU elastomers. The Asia-Pacific region produced 4.9 million tonnes of polyurethane elastomers in 2023, representing a growth of 4.6% compared to the previous year.
China is a prime location for the elastomers market because of its robust manufacturing base and abundant access to raw materials required for elastomer production. China produces 86% of the region's PU elastomers, with the remainder largely produced by South Korea, Vietnam, India and Taiwan. The other countries in the APAC region contribute only a small portion of the output. Elastomers continue to represent by far the largest product category (38% market share) for PU in the region, thanks to the importance of the synthetic leather, spandex and footwear industries. Pakistan, Taiwan and Singapore were the only countries that exhibited decreases in production in 2023. The highest growth rates were seen in Indonesia, Vietnam and South Korea.
In terms of product segment, synthetic leather elastomers have the largest share of around 45% in the Asia Pacific elastomers market; most of this production takes place in China. Due to environmental pressures, the Chinese synthetic leather industry has been forced to improve its processes; this has led to some consolidation.
Coatings
In the Asia-Pacific region, polyurethane coatings are mainly used in wood structures, furniture, construction, appliances, and in marine and automotive applications, in accordance with the production volumes of the main end-use industries. The wood and furniture market accounts for nearly 35% of the whole polyurethane coatings production, followed by architectural and roof, tank and deck coatings. In 2023, the region produced approximately 1.86 million tonnes of polyurethane coatings, representing a decrease of 3.6% compared to the prior year; a return to moderate growth is expected in 2025.
The biggest challenge for the production of polyurethane coatings in APAC in 2023 was the poor situation in China. Production in China was particularly weak and fell by 5.5% in 2023, while the production output of PU coatings in Japan and Taiwan declined by around 1% in each case. Similar to the whole polyurethane market, South Korea performed rather well in comparison and showed a strong growth of 5.3%. East Asia remains the main producer and consumer of polyurethane coatings in Asia Pacific, with China accounting for the lion’s share of production.
The market in South and Southeast Asia remains underdeveloped, owing to the popularity of more traditional, cheaper paints and coatings, such as alkyd, nitrocellulose, acrylics or epoxy-based products. The lack of domestic raw material production is another problem in already price sensitive regions.
Currently, the production of polyurethane coatings is very low in South Asia; the production in Bangladesh, India and Pakistan only represents 0.7% of the global polyurethane coatings production. The awareness of the advantages of PU coatings is growing, but the focus remains small compared to cheaper, competing products.
Adhesives & Sealants
The Asia-Pacific region produced ~1.0 million tonnes of polyurethane adhesives and sealants in 2023, representing an increase of 1.6% compared to 2022. Adhesives accounted for 86% of production in 2023. Footwear and flexible packaging adhesives remained the two largest end-use sectors in 2023, followed by construction adhesives. The highest growth was seen in automotive adhesives. There was a robust performance from automotive adhesives and transport sealants due to the second consecutive year of growth for the automotive industry after poor development since 2019. Construction sealants showed a decline, which was due to the poor performance of the Chinese real estate market in 2023. There was also a decline in the production of footwear adhesives.
East Asia, mostly China, produces the majority of PU adhesives and sealants. This has been made possible by the robust production infrastructure, advanced technology, and the existence of sizable end-use markets for products, such as footwear, flexible packaging, construction and automobiles. East Asian production of polyurethane adhesives and sealants in 2023 witnessed a 1.2% increase from the previous year. The fortunes differed somewhat among the countries, with Japan and Taiwan showing a decline in production. China accounts for, by far, the largest share of production with more than 80% share but is no longer seeing the high growth rates that it enjoyed in the past; indeed, growth in South Korea was higher than China in 2023.
Only small volumes of PU adhesives and sealants are produced in Southeast Asia and South Asia. Since the local economy and technology are underdeveloped, exports from East Asia, Europe and the US dominate these markets.
Binders
In Asia-Pacific, demand for polyurethane binders is still low compared to that of other PU-based products; these binders compete with less expensive furan and urea-formaldehyde binders and have a limited set of uses.
The Asia-Pacific production of polyurethane binders saw a slight decrease of 0.5% in 2023 compared to the previous year. However, this overall regional performance was significantly impacted by a 10% decline in Taiwan and 3.8% decline in China's production. The strongest development was seen in India, where production showed a growth of around 9.4% in foundry core binders. Forest product binders accounted for over 50% of production, with a further 32% in foundry core binders.
Japan is the largest producing country in the region. There is very little production in Taiwan, and it is in the category of rubber crumb binders. China experienced a decline in polyurethane binder production for wood processing in 2023, attributed to reduced demand in the residential and office furniture sectors. The real estate downturn and economic weakness led to lower demand for home and office furnishings, despite government efforts to stimulate consumption, which impacted wood processing and PU binder demand.
The production volume of PU binders is relatively small in South Asia. Production is limited to India and the largest end-use markets are rubber crumb and forest products binders. In SEA and Oceania, demand for polyurethane binders is very small as the production of the related wood products remains low. The main use for PU binders comes from composite wood applications in Malaysia, and rubber crumb applications in Australia, Singapore and Thailand.
The data in this eight-volume report include raw material consumption by product type, by region, by country and by major end-use industry. The Raw Materials volume contains comprehensive supply and demand data for all of the major polyurethane raw material types. The Major End-Use Markets volume contains an overview of the major markets for PU products and a summary of trends and drivers.
The report is available for the following prices:
For more details, please contact:
Mrs Cathy Galbraith
IAL Consultants
CP House, 97-107 Uxbridge Road
Ealing
London W5 5TL
Telephone: +44 (0) 20 88 32 77 80
Email: cgalbraith@brggroup.com
Or visit our website: www.ialconsultants.com
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