Analysis and judgment of polyurethane industry at home and abroad in 2023

Polyurethane (PU) is an organic polymer product produced by the chemical reaction of isocyanate and active hydrogen, and its properties can be adjusted in a wide range, such as from sponge to elastomer, from paint to sealant, from shoe sole slurry to elastic fiber.

China's polyurethane industry began at the end of the 50s of the 20th century and has now become the largest producer and consumer of polyurethane. At present, China's polyurethane production is in a regional concentration trend, has formed Shanghai as the center of the Yangtze River Delta, Guangdong as the center of the Pearl River Delta, Huludao as the center of the Bohai and Northeast region, Lanzhou as the center of the northwest region of four plates, in the future to increase the southwest region centered on Chongqing and Quanzhou centered on the Haixi region plate. At the same time of the development of the industry, there have been many problems, such as overcapacity, few high-end products, and serious product homogenization. These problems have seriously affected the international competitiveness of China's polyurethane industry and need to be solved urgently.

1 International polyurethane industry status

1.1 Development history of international polyurethane industry

In 1937, Otto Bayer in Germany first discovered that polyisocyanates and polyol compounds can be polyformed to produce polyurethane. After World War II, the United States, Britain, Japan and other countries introduced German technology for the production and development of polyurethane. In 1945, the American company Dupont and Monsanto company built a pilot plant of 2,4-toluene diisocyanate to produce rigid polyurethane foam. In 1946, the United States carried out research on rigid polyurethane foam, and the products were used in aircraft sandwich panels. In 1952, Bayer company carried out the pilot test of polyester flexible polyurethane foam, and in 1952~1954, it developed a continuous method to produce polyester flexible polyurethane foam technology, and developed corresponding production equipment. In 1955, Japan introduced German and American technology and began production of polyurethane resin. In 1957, the British company ICI developed polyester rigid polyurethane foam with diphenylmethane diisocyanate as raw material. In 1961, Bayer Company used polyisocyanate PAPI with low vapor pressure to prepare rigid polyurethane foam, which improved the performance of rigid products, reduced toxicity during construction, and was applied to the on-site spraying process, expanding the application range of rigid foam. In the early 1970s, thermoplastic PU elastomers (TPU) were successfully researched. In the early 1980s, PU engineering plastics came out, and the PU industry was presented with a new look. In the 1990s, polyurethane spray elastic materials developed rapidly and became a coating for large-area painting projects.

1.2 International polyurethane production

International polyurethane production has been steadily rising. According to statistics, in 2014, the total global polyurethane production was about 21.5 million tons, and various products accounted for 53.49% (soft foam 5.8 million tons / hard foam 5.7 million tons), polyurethane synthetic leather paste accounted for 16.28%, polyurethane coatings accounted for 15.12%, polyurethane elastomers accounted for 9.30%, spandex accounted for 2.33%, polyurethane sealants and adhesives accounted for 3.49%.

The development of fine chemical products such as polyurethane products is regarded by all countries, especially developed countries, as one of the key strategies for the upgrading and adjustment of the traditional chemical industry, and diversification and refinement are the development direction of the chemical industry. By 2018, global polyurethane production was about 23.07 million tons. At present, polyurethane growth is stable, with global polyurethane production exceeding 25.7 million tons in 2022. According to BCC Research, in 2021, all kinds of polyurethane products accounted for the largest proportion of polyurethane foam, about 61% (flexible foam 37% / rigid foam 24%), polyurethane elastomer accounted for 15%, coating agent accounted for 10%, polyurethane sealant and adhesive accounted for 8%, polyurethane synthetic leather slurry, spandex, etc. accounted for 6%.

Compared with the production of 2021 and 2014, the production of polyurethane foams, elastomers, adhesives and sealants increased by more than 5%, while the proportion of coatings decreased.

1.3 International sales of polyurethanes

In 2014, foam accounted for 63% of the total global polyurethane consumption, concentrated in Western Europe (18%), the United States (15%) and China (30%), elastomers about 800,000 tons, concentrated in China, Western Europe and the United States, shoe resin consumption exceeded 3 million tons, concentrated in China, coatings (including solvents) about 3.5 million tons, concentrated in China (41%), Western Europe (23%) and the United States (17%). It can be seen that the global consumption area of polyurethane is concentrated in China, the United States and Western Europe. In 2019~2022, the global polyurethane consumption scale will generally maintain an upward trend year by year, with an average annual growth rate of about 6.7%.

According to data from Agilelntel Research, the global polyurethane market size is shown in Figure 3, rising steadily in 2016~2019, decreasing slightly in 2020, and then showing an upward momentum. In 2016~2021, the average annual compound growth rate was 7.1%, and it reached 665 million yuan in 2022.

2 Domestic polyurethane industry status

2.1 Development history of domestic polyurethane industry

China's polyurethane industry started late, starting in the late 50s of the 20th century. In 1958, Dalian Dye Factory developed isocyanate (TDI), and in 1962, it built a production unit with an annual output of 500 tons. In the early 1960s, Jiangsu Chemical Research Institute developed polyether PU flexible foam. In the early 1970s, Jiangsu Institute and Nanjing Rubber Factory developed a mixed PU elastomer (MPU), while Tianjin Chemical Research Institute and Tianjin Paint Factory developed PU coatings. In 1974, Beijing Institute of Architecture and Engineering developed PU waterproof materials, and Jiangsu Institute developed PU waterproofing and grout. In 1976, Jiangsu Institute carried out the research and development of PU runway glue technology, and began to promote it in domestic sports venues in 1978. In the 1980s, domestic manufacturers successively introduced 10,000-ton polyether production equipment, such as Yantai Synthetic Tannery introduced PU synthetic leather technology from Japan, and 10,000 tons of MDI production equipment. In the 21st century, the polyurethane industry has become one of the fastest growing industries in China's chemical industry.

2.2 Domestic polyurethane production and sales

The output of China's polyurethane industry in 2014~2021 is shown in Figure 4. It produced 966 tons in 2014, 10.35 million tons in 2015, 10.85 million tons in 2016, and 11.89 million tons in 2017, maintaining a compound annual growth rate of 7.28%. Production in 2020 was about 14.7 million tons, a year-on-year increase of 7.6%, and reached 15.32 million tons in 2021, a year-on-year increase of 4.22%.

China's polyurethane consumption was about 9.6 million tons (containing solvents) in 2014 and about 12.4 million tons in 2020, a year-on-year increase of 4.6%. During the "Thirteenth Five-Year Plan" period, the polyurethane industry showed moderate growth. According to the "Analysis of the Operation Status of China's Polyurethane Industry and Investment Strategy Research Report (2023-2030)" of the Guanyan Report Network, the consumption of polyurethane in 2021 will be 12.63 million tons, a year-on-year increase of 1.85%, of which polyurethane flexible foam consumption accounts for 27%, the main application areas include car seats, furniture, fabric upholstery, etc., polyurethane rigid foam consumption accounts for 26%, mainly used in refrigerator freezers, cold chain logistics and other thermal insulation fields, as well as building exterior wall insulation and energy saving and other fields.

2.3 Distribution of domestic polyurethane consumption

The consumption of polyurethane products in China in 2014 is shown in Figure 5. Polyurethane foam accounted for the largest proportion, about 40% (soft foam 20.82%/hard foam 18.90%), synthetic leather slurry accounted for 21.91%, coatings accounted for 16.30%, adhesives and sealants accounted for 5.04%, and elastomers accounted for 4.12%.

Consumption in 2021 is shown in Figure 6. Polyurethane foam still accounts for the largest proportion (soft foam 27% / rigid foam 27%), elastomers 20%, coatings 16%, adhesives and sealants 6%.

Comparing the proportion of consumption in 2014 and 2021, it can be seen that polyurethane foam (including soft foam and hard foam) in China's polyurethane consumption is still the largest proportion of products, and the proportion of hard foam and soft foam is increasing, elastomer is the largest increase in the product, the proportion of coatings is relatively stable, and the proportion of synthetic leather slurry continues to decline, which is consistent with the international polyurethane consumption trend.

1) Polyurethane foam

Polyurethane foam is widely used in thermal insulation, furniture production, etc. According to Allied Market Research data, the sales volume of polyurethane foam (including flexible foam and rigid foam) in China was 1.3783 million tons in 2019, and it is estimated to reach 1.6526 million tons in 2022, with an average compound growth rate of 6.24% in 2019~2022. The guidance of the "13th Five-Year Plan" development plan of the plastics processing industry pointed out that vigorously implement the "import substitution" strategy, and strive to meet the needs of economic and social development, especially in high-end fields, by 2025, and some products and technologies will reach the world's leading level.

2) Polyurethane elastomer

Polyurethane elastomers are divided into pouring type, thermoplastic type and mixed type according to the production process, and are widely used in steel, conveyor belt, papermaking adhesive spokes and other fields. In recent years, the proportion of polyurethane elastomers in polyurethane products in China has been increasing. In 2015, the consumption of polyurethane elastomer was 860,000 tons, a year-on-year increase of 4.2%, rising to 1.07 million tons in 2018, and the consumption continued to increase in 2019~2022, mainly because the automotive field and the construction industry used a large number of thermoplastic elastomer (TPE) materials, driving the development of the industry.
3) Polyurethane coating

In 2015, the consumption of polyurethane coatings was about 1.65 million tons, accounting for 16% of the sales volume of polyurethane products, and reached 2.45 million tons in 2021, accounting for about 16%. At present, there are more than 60 kinds of polyurethane coatings, and the production enterprises are concentrated in coastal areas.

4) Polyurethane synthetic leather slurry

Synthetic leather PU slurry includes dry synthetic leather and wet synthetic leather. At present, China is the world's artificial leather synthetic leather industry center, and China's synthetic leather slurry production accounted for nearly 85% of the world in 2019. In recent years, the consumption of synthetic leather slurry in China has continued to decline, the reason is that solvent-based synthetic leather slurry will pollute the environment, under the green environmental protection advocacy, inhibit the demand and consumption of synthetic leather slurry, and second, the fierce competition of enterprises, compressing the profit space of the industry. In the future, the industry will innovate and popularize eco-functional synthetic leather such as waterborne synthetic leather and solvent-free synthetic leather, so as to improve the environmental protection and rich functionality of artificial leather synthetic leather.

2.4 Domestic polyurethane import and export

According to the import and export data of the General Administration of Customs, the import and export amount of primary shape polyurethane products in China in 2017~2022 is shown in Table 1.

As can be seen from Table 1, in 2017~2022, China's polyurethane import and export amount has evolved from imports in 2017 to exports in 2021 that are much greater than imports. In terms of import amount, it increased slightly in 2017~2018, decreased in 2019, continued to decline in 2020, and rebounded in 2021; In terms of export value, the change is similar to that of imports. The reason is that the polyurethane industry has shifted from the pursuit of extensive expansion of quantity and scale to the pursuit of intensive growth of efficiency and quality, and a number of large polyurethane enterprises have been successfully put into production, reducing dependence on foreign markets, and second, the key technology of isocyanate and Polyester Polyol monopolyol is monopolized in the hands of Bayer, BASF, Huntsman and other multinational companies, China still needs to import high-tech polyurethane products, and the import quantity is maintained above a certain level.

3 Conclusion

1) China has become a major consumer market and producer of polyurethane. At the end of the 90s of the 20th century, China's polyurethane products were only 800,000 tons, reaching 3 million tons in 2005, with an average growth rate of more than 15% in 2005~2010, and reached 10.35 million tons in 2015, accounting for 40% of the world's total production and sales. The "Thirteenth Five-Year Plan" put forward the industrial policy of "adjusting the structure, changing the mode and promoting development", and China's polyurethane industry entered a low-speed growth. In 2021, China's polyurethane output will be 15.32 million tons, a year-on-year increase of 4.22%.
2) China's polyurethane products exports are greatly affected by the international economic situation, mainly China's polyurethane products are mostly low-end products, and the exporting countries are mostly developing countries. Therefore, the industry should adjust the direction of development, resolve the crisis of overcapacity, accelerate technology research and development, develop high-end, high-performance, functional products, and enhance product competitiveness.

3) The application field of products is expanding day by day. Over the years, the output and consumption of polyurethane products in China have continued to grow. The demand in downstream markets such as home appliances, furniture, transportation, machinery, construction, and new energy has driven the growth of polyurethane product consumption. The industry should develop environmentally friendly polyurethane products, accelerate the application in building energy conservation and other fields, expand the application field of differentiated, functional, high value-added spandex fiber, and expand the application field of TPU.

4) Continuous optimization of industrial structure. With the overcapacity of polyurethane, it is necessary to eliminate industries that are technologically backward and do not meet the requirements of green environmental protection. During the "14th Five-Year Plan" period, the polyurethane industry should promote the continuous optimization of industrial structure, product structure and layout structure, and gradually solve the problem of unbalanced and insufficient development.