By Lv Guohui, China Polyurethane Industry Association

Consumption of polyurethane (PU) products

China’s consumption of PU products (including solvents) fell slightly to 12 million tons in 2022, but in 2023, PU raw material output and PU product consumption both increased. In detail, China consumed 4.45 million tons of PU foam – categorized into flexible and rigid foam – in 2022, when consumption of PU elastomers reached 1.57 million tons, mainly involving thermoplastic, cast and millable PU elastomers. With the fastest demand growth in recent years, thermoplastic PU elastomers have replaced materials like PVC and EVA in many applications.

PU coatings are mainly used as wood lacquers, automobile refinishing coatings and waterproof paints. PU wood lacquers have dominated wood coatings market, PU automobile refinishing coatings could occupy around 40% of the market, and PU waterproof paints have developed rapidly in recent years. In 2022, domestic consumption of PU adhesives/sealants reached 1.13 million tons, that of PU resins for soles 510 000 tons, that of PU synthetic leather resins 1.52 million tons and that of PU fiber 780 000 tons (see Table 1 for details).

Capacity and consumption of main PU raw materials

1) Toluene diisocynate (TDI)

China’s TDI capacity was 1.42 million t/a in 2022, and is forecast to have reached 1.49 million t/a in 2023. In recent years, domestic TDI output has increased, TDI consumption has stayed at around 800 000 tons, and export volume of TDI has grown. Table 2 shows China’s TDI capacity and consumption from 2018 to 2022.

2) Methylene diphenyl diisocyanate (MDI)

China’s MDI capacity reached 4.29 million t/a in 2022. The world’s major MDI producers include Wanhua Chemical Group Co., Ltd. (Wanhua Chemical), Shanghai Lianheng Isocyanate Co., Ltd., Covestro and BASF. As an important MDI production base in the world, China produced 3.3 million tons of MDI mother solution, and consumed 2.55 million tons of MDI, both in 2022. Table 3 shows domestic MDI capacity and consumption from 2018 to 2022. 

3) Hexamethylene diisocyanate (HDI)

In 2022, China had two HDI producers, i.e. Covestro Shanghai boasting 100 000 t/a HDI capacity and Wanhua Chemical constructing two 50 000 t/a MDI units in Yantai and Ningbo, respectively. HDI monomers are mainly used to produce HDI curing agents in China. Global producers of HDI curing agents mainly include Wanhua Chemical, Covestro, BASF and AsahiKASEI. Domestic capacity of HDI curing agents was 171 000 t/a in 2022, with Wanhua Chemical boasting the highest of 100 000 t/a. Output in the same year reached 125 000 tons.

4) Propylene oxide (PO) and polyether polyol

Domestic PO capacity was 4.9 million t/a in 2022, and output reached 3.76 million tons. Import volume in the same year dropped more than 30% YoY to 300 000 tons, further decreasing dependence on imports. China’s PO consumption exceeded 4 million tons in 2022, and the largest consumer was still polyether polyol industry, followed by PG/DMC, propylene glycol ether PM, TCPP fire retardants and isopropanolamine industries.

China’s capacity of polyether polyol reached 7.4 million t/a in 2022, and may soar more than 5 million t/a in the next few years, spurred by capacity expansion of enterprises like Wanhua Chemical, Longhua, Dongda, etc. There will be a higher risk of overcapacity. Further, domestic polyether polyol output was 4.09 million tons, export volume exceeded 1.3 million tons and apparent consumption reached 3.24 million tons, all in 2022 (see Table 4 for details).

5) Polyester polyol (adipic acid type)

China has many polyester polyol producers, mainly concentrating in Zhejiang, Shandong, Guangdong, etc. In 2022, domestic capacity approached to 3 million t/a, and consumption reached around 1.06 million tons. More than 80% of output was utilized by manufacturers themselves to produce resins for soles, synthetic leather paste, TPU, etc.

Future development of China’s PU industry

China’s PU industry has entered a high-quality development phase. Growth of PU consumption decelerates, but firms are still active to invest in PU raw material projects. Risk of PU overcapacity exacerbates, and more intense competition will drag down profits of PU firms, which should speed up R&D on differentiated, high-end, bio-based and degradable products. While stabilizing high-quality development in China, they are wise to expand overseas markets.

The China Polyurethane Industry Association compiled guidelines on the development of China’s PU industry from 2021 to 2025, detailing key development directions: 1) optimizing PU raw material production processes (striving for energy integration, circular economy, decrease of carbon emissions, reduction of waste water, waste gas and solid wastes, etc.); 2) replacing fossil raw materials with bio-based and renewable materials (e.g. CO2-based and bio-based polyols, etc.); 3) developing green PU products (featuring non-toxic and harmless raw materials, limited content of toxic and harmful substances, low VOCs, etc.); 4) researching PU resins used in composites such as glass fiber and carbon fiber; 5) recycling PU products (e.g. physical and chemical recycling of foam and elastomers, etc.).