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Global demand for Polyurethane to rise with growing need towards energy efficiency

Global demand for Polyurethane to rise with growing need towards energy efficiency

14-Nov-13

All around the globe, energy efficiency is becoming more and more important in buildings, vehicles and electric devices, which will lead to an increasing use of Polyurathane (PUR) as insulating material. Ceresana forecasts global demand for PUR to rise by, on average, 4.5% per year. This increase of demand is mainly supported by innovations that continuously open up new application areas for PUR. Asia-Pacific already is the prime market for PUR, accounting for about 44% of global demand, followed by North America and Western Europe. The focus of PUR demand is forecast to continue to shift towards Asia-Pacific, at the expense of saturated industrialized markets in Western Europe and North America. Demand in emerging countries, on the other hand, is profiting from a continuous increase of wealth. The by far most important growth motor on the international market is China. In order to satisfy the rising demand for PUR, production capacities have to be expanded considerably, in Asia-Pacific in particular. In total, global isocyanate capacity, currently amounting to 8.8 mln tons, is scheduled to increase by more than 3 mln tons until 2020. Over 81% of these new capacities will be created in Asia-Pacific. As the study explains, especially the development of new PUR-based materials for an increasing number of applications is necessitating a significant increase of production capacity. A major consumer of PUR is the Construction industry, as a range of state-funded programs target at improving energy efficiency. All around the world, PUR-based products are used in the construction of new residential buildings and in the refurbishment of older structures. Even on saturated markets, this can provide growth impulses. The versatility of PUR opens up an increasing number of possible uses in the Transportation industry as well. Bearing in mind their customers' preferences, manufacturers of automobiles are developing vehicles that are more and more fuel and energy efficient. Utilizing PUR leads to a reduction of gross weight and contributes significantly to an improved life-cycle assessment. Individual application areas for PUR are projected to develop at highly divergent growth rates during the upcoming eight years. Experts at Ceresana forecast the highest growth rates of 5.7% p.a. for applications such as cooling and refrigerating units, shoes and textiles as well as sports and leisure goods, closely followed by the Construction industry. As a result, the Construction sector will become the most important sales market for PUR, driven by measures to increase energy efficiency. Less dynamic growth rates of, on average, 3.3% p.a. each are anticipated for the segments Furniture/Bedding and Industrial goods.

The current worth of the global Polyurethane Foams Market (2012) is US$40.1 bln and is estimated to reach US$61.9 bln by 2018, growing at a CAGR of 6.9% from 2013 to 2018, as per Markets and Markets. High demand across the industries, such as bedding & furniture, building & construction, and automotive will increase overall Polyurethane foam consumption. Polyurethane foam types are significantly penetrating their end-user industry market. These have different characteristics as per manufacturing and their application requirement in the end products. The Asia-Pacific market is expected to dominate with its growing demand for polyurethane foams in different applications especially bedding & furniture, and building & construction. The Western European and North American markets are expected to show a rising growth in the next five years with allied industries expected to stabilize the overall business need in the respective regions. R&D is a key part of this market where manufacturing companies, associations and end product makers infuses high investments for future advancements and technology modifications of polyurethane foam to match new demands coming from various end-user industries. Polyurethane foams are dominant in consumption and revenue made, reasoned by its optimal cost to performance factor. Asia-Pacific is the largest region, both in terms of volume and value, followed by Western Europe and North America. China, Japan, U.S., Germany, Brazil and Russia are expected to persist as successful foam markets. The major players in the global polyurethane foam market are Armacell LLC (Germany), BASF SE (Germany), Bayer Material Science AG (Germany), British Vita Foams plc (U.K.), Carpenter Co. (U.S.), Chemtura Corporation (U.S.), Huntsman Corporation (U.S.), Recticel S.A. (Belgium), Rogers Corporation (U.S.), The Dow Chemical Company (U.S.), and Woodbridge Foam Partner (U.S.). Eastern and central European nations, emerging South-East Asian and Latin American nations that host global events would supplement the growth of polyurethane foams. An increase in auto sales, proposals for improvement of infrastructure, and rising housing market in emerging economies will drive the polyurethane foam market.

The global polyols and polyurethane markets are expected to reach US$22.6 bln and US$66.4 bln respectively by 2018, as per Transparency Market Research. As per the report, polyol demand was over 7.5 mln tons in 2012 and is expected to cross 10.4 mln tons by 2018, growing at a CAGR of 5.5% from 2012 to 2018. Polyurethane demand in 2012 was worth US$43.2 bln and is expected to reach US$66.4 bln by 2018, growing at a CAGR of 7.4 % from 2012 to 2018. Key raw materials used in manufacture of polyurethane are diisocyanates, polyols and other additives. Polyols comprise the largest volume of polyurethanes. The rebound in furniture, interiors and construction industry in North America and Europe, as well as rapid economic growth in Asia Pacific is expected to remain the major driving force for the polyurethane market. Volatile raw material prices coupled with increasing regulatory pressure for sustainable solutions is expected to be a key challenge for market participants. Industrial polyols are mainly used in production of polyurethane; hence the drivers and restraints impacting the polyurethane market are also expected to affect the polyols market. Polyether polyols dominated the overall market, accounting for over 70% of the total demand in 2011. Flexible and rigid foam were the most dominant product segments, accounting for over 65% of total PU demand in 2011. Polyurethane is mainly employed in furniture and interiors, construction, electronics and appliances, automotive, footwear and packaging. Furniture and interior industry dominated the global market followed by construction industry. The electronics and appliances industry is expected to be the key growth market for polyurethanes over the next five years. Asia Pacific accounted for 40.4% of the total polyurethane market in 2011, followed by Europe and North America. Asia Pacific is also expected to be the fastest growing regional market in terms of both PU consumption and production. This can be attributed to the growing economies and increase in amount spent on luxurious products in this region. Cheap availability of raw materials, skilled labor, land, and equipment has resulted in Asia Pacific emerging as a key destination for manufacturers of polyurethanes. Europe is the other major region where polyurethane consumption was very strong and is expected to grow in demand with a CAGR of about 7.3% in terms of revenue from 2012 and 2018. BASF SE, Bayer MaterialScience, Huntsman Corporation, Dow Chemicals, and Yantai Wanhua are some of the major participants in the polyurethane industry.

The global market value of polyurethane will rise in the coming years, with thermal insulation potentially becoming a key material application, predicts a new report by business analysts GBI Research. The report states that polyurethane rigid foams made from Methyl Diphenyl Diisocyanate (MDI), which have been used for thermal insulation purposes in developed countries for years, are now gaining acceptance in other regions and boosting the global demand. In Europe, the energy performance of buildings is seen as key in achieving EU Climate & Energy objectives: cut 20% of greenhouse gas emissions by 2020, and make a saving of 20% on energy expenditure by the same year. Polyurethane rigid foam as an insulation material is becoming more widely used in the Asia-Pacific region, as well and Central and South America, as governments formulate more policies promoting energy efficiency and conservation. eg-China's Ministry of Finance recently announced it was to allocate RMB 1.7 bln (US$11 bln) to support construction energy efficiency programs in the country under its 12th five-year plan, and this growingly relevant material is expected to be an important part in this effort. The global demand for polyurethane has steadily increased, due in no small part to Asia's booming economies. Furthermore, GBI Research expects worldwide demand to grow at a CAGR of 5.8% from 12,018,579 tons in 2010, to 16,882,412 tons in 2016, with the Asia-Pacific region accounting for over 60% of this figure. Over the last decade, polyurethane manufacturing companies have moved into Asia in order to take advantage of lower production costs. The increase in the number of production facilities in countries such as China is considered to be the primary reason for demand growth – an assertion reinforced by an Asia-Pacific share of 53.5% of the total global demand in 2010. The analysis shows that flexible and rigid polyurethane foams made up the bulk of the total end-use segment in 2010, accounting for 60% of the full amount. These materials, which are commonly used in the construction, automotive/transport, furniture and footwear industries, are expected to continue as the leading polyurethane products in the coming years.

Global Polyurethanes market is projected to reach US$49.7 bln by 2016 (28 mln tons), growing at a CAGR of 7.8% during, 2011-2016, as per Global Market Watch. Primarily supported by product types; Rigid & Flexible, Coatings and Adhesives the Polyurethanes (PU) market to witness a value of US$49.7 bln by 2016. Geographical analysis shows the highest CAGR of 8.6% is foreseen from Asia-Pacific region during the analysis period 2011-2016. Europe is way behind with a CAGR of 8.1% followed by the Americas at 7.1%. Among the segments, Rigid & Flexible accounts for nearly 30.4% of the overall market share; Coatings and Adhesives products stand at second and third positions respectively. Global market for Polyurethanes (PU) is rapidly growing and has registered an increase in next five years due to widely used in automotive and electronic applications. In terms volume Polyurethanes (PU) is expected to reach 28 million tons by 2016, growing at a CAGR of 10.4%.

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