|MDI (Methylene diphenyl diisocyanate) and TDI (Toluene diisocyanate) are diisocyanates that are primarily used as raw materials for polyurethanes. Polyurethanes are some of the most versatile polymers in existence today. They exist in myriad forms ranging from rigid foams to dense solid compositions and from flexible foams to elastomers. Polyurethanes are commercially available in various forms, ranging from flexible or rigid lightweight foams to tough, stiff, and strong elastomers. This enables their use in a wide variety of consumer and industrial applications such as thermal insulation of buildings, refrigerators, household furniture, automotive seating, shoe soles. The volatility in crude oil prices, which have driven prices of MDI and TDI, in recent times, have been a key factor hampering market growth. On the other hand, growth of end-use industries such as construction and electronics is expected to drive polyurethane demand in the next five years. PU (Polyurethane) occurs in mainly two forms; PU foams and PU non foams. Rigid PU foams are used primarily as an insulation material in construction and refrigeration applications whereas Flexible PU foams are used mainly as a cushioning material in transportation, furniture, bedding, carpet underlay, and packaging. Thermosetting elastomers and thermoplastic elastomers are main types of PU elastomers, of which thermosetting hold the largest market share of around 75%.
As per Research and Markets, the global market for polyurethanes was estimated at 13,650.00 kilo tons in 2010 and is expected to reach 17,946.20 kilo tons by 2016, growing at a CAGR of 4.7% from 2011 to 2016. In terms of revenue, the market was estimated to be worth US$33,033 mln in 2010 and is expected to reach US$55479.68 mln by 2016, growing at a CAGR of 6.8% from 2011 to 2016. North America, Asia-Pacific, and Europe dominate the polyurethane market and together accounted for 95% of the global polyurethane demand in 2010. North America and Western Europe are mature markets and are expected to grow at a sluggish rate. However, Asia-Pacific, Eastern Europe and South America are expected to drive the demand for polyurethanes in the coming decade. The furniture and interior industry dominated the polyurethane market, accounting for 28.01% of the total demand in 2010. The second largest end-use of polyurethanes is in construction industry, which accounted for 24.98% of the overall market in 2010. Electronic appliances, however, are the fastest growing market for polyurethanes. Polyurethane demand for electronic appliances is expected to grow at a CAGR of 7.3% to 2011.
As per Global Industry Analysts, the global market for foamed plastics (polyurethane) is projected to reach 9.6 mln tons by the year 2015, driven by resurgent demand from construction, furniture and bedding, and automotive markets. The need for low-cost and long-lasting materials and rising significance of energy efficiency in appliances and buildings is expected to foster growth in the foamed plastics market. The global economic meltdown led to significant decline in demand for polyurethane (PU) foams across the globe, largely due to the contraction in majority of the end-use markets including automotive and construction. Both flexible and rigid PU foams registered decline during 2008 and 2009, with the demand for flexible PU foams registering steeper decline in the US and Western Europe. The crisis forced several companies, particularly small manufacturers to shutdown production units permanently, while manufacturers with multiple production units sought reprieve by closing down some capacity. Europe, Asia-Pacific, and the United States dominate the world foamed plastics (polyurethane) market, as stated by the new market research report on foamed plastics (polyurethane). Buoyed by the robust Chinese, Indian and Hong Kong markets, Asia-Pacific region represents the fastest growing PU foams market, with a CAGR of 4.9% over the analysis period. Middle East has been witnessing healthy growth over the past few years. Increasing investments in polyurethane production, coupled with new encouraging regulations has largely contributed to market growth in the region. Demand for PU foams is highly dependent on diverse end-use applications particularly in furniture and automotive sectors. Subdued consumer spending, slowdown in new housing starts, decline in automotive production, and increase in the volume of imported furniture contributed to a significant decline in PU production, particularly in the US and Canada. Despite such adversities, the market is expected to register growth owing to the increasing concerns about energy conservation. This is evident by the rising demand for spray polyurethane foam in the industrial and residential applications as well as the use of polyurethane for insulating structures such as tents at Army bases. Furniture/Bedding represents the largest end-use market for PU foams, globally, with Asia-Pacific region offering enormous growth opportunities for the segment. An ageing health conscious population is driving significant changes in the bedding industry. Mattresses are categorized as innerspring, foam, water, and air-filled, among which foam mattresses are likely to witness a booming growth. PU foam plays a significant role in the construction of mattresses due to its effectiveness in relieving pressure points. Demand for reactive polyurethane hot melt adhesives is likely to increase, which could displace solvent-based adhesives. Global polyurethane market is largely dominated by the four stalwarts, which include Dow, Bayer, BASF and Huntsman, in terms of production capacity. Competitive factors determining the player market presence include price, quality, and assortment of products and services. Major players profiled in the report include BASF AG, Bayer AG, British Vita Unlimited, The Dow Chemical Company, FXI - Foamex Innovations, Huntsman Polyurethanes, Mitsui Chemicals Inc., Recticel S.A, and Woodbridge Foam Corporation.
As per IAL Consultants, despite a challenging economy and declining production, the polyurethane industry continued to evolve over the past two years while addressing growing concerns over energy conservation, according to the 2008 End-Use Market Survey on the Polyurethanes Industry in the United States, Canada and Mexico. Research conducted by IAL Consultants on behalf of the Center for the Polyurethanes Industry (CPI) of the American Chemistry Council, shows that overall production of polyurethane in NAFTA declined by 6.7% pa during the past two years. The figure reflects a 7.7% annual decline in U.S. markets and 10.8% decline in Canada, while Mexico has shown positive growth for the third consecutive survey. The production of polyurethane in Mexico increased at an average annual rate of 9.6% over the past two years, partly due to increased domestic demand.
�With the dip in automotive output, decreased consumer spending, high levels of imported furniture and a drop-off of activity in new housing starts, we were prepared to see a decline in polyurethane production in the U.S. and Canada,� said Neeva-Gayle Candelori, Director of CPI. Overall, the research shows that the industry continues to change. While some markets are mature, new ones have opened up. Renewable chemicals and energy efficiency continue to be important topics. Change is essential for evolution and it would be worrying if there were no signs of market evolution. Signs of growth in the polyurethane industry included continued increases in spray polyurethane foam demand for residential and industrial applications, as well as use of the material by the U.S. Army to insulate tents and other structures at bases in the Middle East. Polyurethane also is being used for effective wound dressings, pharmaceutical delivery media, reliable drug delivery, comfortable mobility aids and hygienic hospital environments. The demand for low-VOC and high-performance coatings related to product substitutions made the decline in the production of coatings, adhesives, sealants and TPU less severe. Though there was a sharp decrease in binder production as a result of the decline in OSB (oriented strand board) demand by the U.S. housing sector, the desire for safe and clean recreational areas has helped increase use of polyurethane binders in sports tracks and playgrounds in the past two years. New applications to improve quality of life are contributing to market evolution as well, such as new comfort levels in golf cart seating for the growing number of elderly. Manufacturers looking to comply with new regulations and secure certification are also finding ways to create opportunities for growth. The survey shows a boost to the rigid polyurethane foam market for thicker panels needed to meet new ASHRAE (American Society of Heating, Refrigerating and Air-Conditioning Engineers) standards. CARB (California Air Resources Board) regulation and the CertiPUR program also helped to secure business in the bedding industry for flexible polyurethane foam. The United States, representing 81% of the total polyurethane production in NAFTA, had a market breakdown similar to NAFTA overall. Imports of upholstered furniture continued to increase in the United States. Though statistics from the U.S. Department of Trade and Commerce did indicate a slight drop in overall imports during the past two years, these were a reflection of the current state of the housing market and declining consumer demand. In Mexico, production of rigid polyurethane foam dominated the market as new companies invested in the country and the appliance industry continued to grow. In 2008, the Mexican appliance industry produced 9 mln refrigerators and freezers compared to 11.3 mln in the United States. Mexican furniture and automotive markets also grew during 2008, driven by export and domestic demand. With 2.1 mln units in 2008, automotive production exceeded Canada�s. Flexible molded foam end-use production increased due to the manufacture of automotive components and flexible slabstock production increased, as well. Though families currently prefer to buy new upholstered furniture over new mattresses, the bedding market has potential for further development. Despite a deficit of 5 million homes in Mexico, home ownership has increased. Canada�s dependence on the United States resulted in a greater production decline than experienced in the U.S. The country was the third market in the NAFTA region and accounted for 8.9% of total production. Flexible foam slabstock accounted for 16% of total production, compared to 21% in 2006 and the fall in U.S. housing starts led to 54% of OSB production being idled. As an environmentally conscious country, the population continued to buy products marketed as �eco-friendly�, such as rigid polyurethane foam and flexible polyurethane foam. Rigid polyurethane foam accounted for 39% of production in 2008 compared to 28% in 2006, another sign of interest in greater energy efficiency. In the energy sector, components made from polyurethane cast elastomers, technical insulation coatings and sealants received increased capital expenditure for maintenance and development, mainly as a response to the high oil prices of 2007 and the first half of 2008.
Once again, rigid polyurethane foam products accounted for the largest share of the 6.5 billion lbs of polyurethane produced in NAFTA in 2008. The figure reflects the relative strength in demand for rigid polyurethane foam as an insulation material. The past two years have witnessed stable demand from the construction industry. New housing starts have declined, but expenditures on remodeling and repairs increased. This development is largely responsible for the growing demand for spray polyurethane foam as internal wall insulation and the slower than expected decline in CASE products like elastomers used in thermal breaks in insulated windows, solar panels, wooden floor and turbine blade coatings, adhesives and sealants, and the steady demand for one component spray foams. The versatility of spray polyurethane foam also has contributed to its use in army tents and structures in the Middle East where it has contributed to fuel savings. As part of its industry-wide survey, IAL looked in depth at the factors affecting the declining demand for flexible polyurethane foam in the automotive, furniture and bedding industries:
Furniture/Bedding: United States production of flexible slabstock foam fell sharply from 2006 - 2008. Flexible foam stock production dropped by nearly 25% in 2008 compared to 2007. The main impetus behind this decline is the decrease in furniture production due to lack of consumer demand and imports. Imports of upholstered furniture continued to rise until the end of 2007. The rate of imports is not expected to change in the near future as U.S. government incentives to first-time homebuyers will likely go towards imported goods. The bedding sector continued to use large volumes of flexible polyurethane foam during 2008. Mattresses manufactured in the United States used more foam per unit for deeper mattresses with softer toppers; more hybrid mattresses were produced, as well. Since the end of 2008, factors such as the reduced cost of lower density foams, thinner mattresses, and customers requiring faster delivery times for mattresses than other furniture delivery (2 -5 days), have helped protect the industry from imports.
Transportation: While the automotive industry has experienced significant downsizing, it has also seen an increased demand for more economical vehicles. Production fell by 3.1 million since 2006, but there are now roughly 8 million flexible fuel vehicles on U.S. roads and more are expected in the future. Polyurethane foam used in automotive seating has trended toward becoming thinner, while density is increasing, offering more cabin space above the seat and allowing the required amortization of vibration. The decline in molded seat foam is related to the general downtown in automotive production.