Polyurethane Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Polyurethane Category Overview

The polyurethane (PU) category is anticipated to grow at a CAGR of 4.4% from 2023 to 2030. The term polyurethane denotes a category of polymers made up of organic molecules connected by carbamate bonds. In 2022, the Asia Pacific region held a dominant position in the market, contributing over 45.1% of worldwide revenue. PU is widely used in numerous end markets, in a variety of forms such as flexible, rigid, elastomers, adhesives, coatings, sealants, and others. Hence, it plays a very important role in consumer markets. According to Plastics 2021 report, among polymers, PU held a market share of 8 - 10%, however, the category is gaining traction as companies increasingly focus on sustainability. For instance, manufacturers and suppliers have increased the pace of sustainable and bio-based PU commercialization dramatically. In recent times, the growing trend of consumers' interest in sustainability is reflected in the usage of polyurethanes in electric vehicles.

The increased demand from the automotive and construction sectors coupled with a strong focus on sustainability measures and the use of recycled materials are driving the category growth. The robust demand for packaging as a result of the high online sales and booming e-commerce sector is also aiding the expansion of PU. The new 2023 isocyanate regulations on products using PU will likely hamper the category to some extent. Diisocyanates are a key component in PU coatings, foam, and adhesives and they are highly reactive. According to the new EU REACH regulations, diisocyanates cannot be utilized after August 24, 2023, either alone or in mixes for industrial and professional usage. It can be used under these conditions - a) diisocyanates constitute less than 0.1% of the total weight and b)When utilizing objects that contain more than 0.1% of the chemical, the employer should confirm that its employees or workers have received instruction on how to utilize diisocyanates safely.

The polyurethane category is highly fragmented. On a parent level, the growing use of different types & specifications of polymers across several industries has resulted in increased fragmentation. With the evolvement of production processes and new applications, new PU suppliers continue to enter the market. As a result, the bargaining power of suppliers is reduced. However, large corporations such as Dow Chemical or BASF have higher negotiation power compared to small players owing to a larger share of the market and brand value. To meet the growing demand, companies are also expanding their capacities. Prominent providers of polyurethane and several startups are creating bio-based or recycled substitutes for PU feedstock. For instance,

• In November 2023, Arkema announced the introduction of its latest bio-based polyurethane thickeners for interior and exterior applications. The solutions are expected to provide more than 30% savings in energy.

• In January 2023, BASF announced the expansion of its methylene diphenyl diisocyanate (MDI) project located in Louisiana, U.S. The capacity will increase to 600,000 metric tons annually to meet the growing MDI demand in North America.

Reactions between polyols and diisocyanates-both of which are frequently sourced from crude oil-produce polyurethane foams. Other materials, including colourants, catalysts, additives, and carbon dioxide or water, are combined with the diisocyanates and polyols according to the specifications of the PU foam that is to be created. Hence, such raw materials form a significant component in the total cost of polyurethane. Fluctuations in the prices of crude oil can have a dramatic effect on the total cost of production. Raw materials, energy, equipment, labour, transportation, storage, and facilities are some of the key cost components. Other costs can include marketing, utilities, indirect or overhead costs, repairs and maintenance, tax, insurance, etc.  

Polyurethane resin prices followed a bearish momentum throughout October 2023. The primary reasons were attributed to reduced international exports and low demand from both the automotive and construction industries. As OPEC+ countries continue to cut production rates, crude oil prices have depreciated by more than 1% due to easing sanctions imposed upon Venezuelan crude oil. At the end of Q3 2023, PU resin (grade: rheological) prices in the North American region declined on account of decreasing methyl diisocyanate and toluene diisocyanate prices. The prices of methyl and toluene diisocyanate witnessed a 14 - 15% drop during the same period. Growing federal interest in the U.S. caused many mortgaged building projects to be cancelled, which further decreased PU demand from the construction sector. PU demand was also low in the automotive sector as a paint modifier. At the end of June 2023, PU prices reached USD 1,863/MT. At the end of Q2 2023, polyol prices reached USD 3,290/MT.

The top exporters of polyurethanes are Vietnam, China, Germany, and the U.S. as of November 2023. Vietnam accounted for 1,531,580 export PU shipments in August 2023. On the other hand, China (USD 845 million), Germany (USD 509 million), Vietnam (USD 451 million), the U.S. (USD 425 million), and Italy (USD 403 million) were the biggest importers of polyurethanes in 2021. The majority of the world's polyurethane exports are shipped to Vietnam, India, and Indonesia. Germany and China, together account for almost 30 - 35% of the total exports worldwide. Most of the large end-user organizations enter long-term contracts with their approved providers, under sourcing intelligence. For only chemical manufacturing, most of the time, companies/ clients prefer full outsourcing. However, depending on the product and application area, sometimes companies also use a hybrid outsourcing model. 

Polyurethane Procurement Intelligence Report Scope