Polyurethane Market

Market Overview

The global polyurethane market size was valued at USD 75.80 billion in 2022. It is projected to reach USD 108.82 billion by 2031, growing at a CAGR of 4.1% during the forecast period (2023-2031). 

Polyurethane is obtained by the reaction between polyols and di-isocyanate. It is widely used in the manufacturing of polyurethanes and other products. Polyurethane offers a myriad of benefits, such as high abrasion resistance, easy ambient curing, high molecular structural variability, low cost, and other benefits, making it one of the preferred plastics. Polyurethane is one of the most popularly used polymers in the automobile, construction, and electronic industries. However, the decomposition of polyurethane-based end products poses a huge challenge as they don't easily break down. For instance, furniture using polyurethane as cushioning may take up to 1,000 years to decompose. Additionally, the fluctuating price of raw materials due to the U.S.–China trade war, volatility in crude oil prices, and strict environmental regulations are restricting market growth. In line with this, the manufacturers are channelizing efforts to manufacture environment-friendly products, further driving the market growth.

Market Dynamics

What are the primary factors driving the Polyurethane Market?

Rapidly Expanding Furniture Industry

In the furniture industry, polyurethane is primarily used as a foam for cushioning and bedding applications. The furniture industry can use it because of its adaptability, toughness, and capacity for comfort. Without polyurethanes, modern homes and workplaces would be much less comfortable. Flexible polyurethane foams are soft but offer good support, are strong, and keep their shape over time. They can be manufactured to the density required by the manufacturer and are a great and secure filling material for mattresses and seat cushions. Their adaptability enables designers to use all of their creativity when developing new products. Polyurethane foams adapt to the contours of the body and support them. Popular polyurethane material, memory foam conforms to the shape of the body to promote sound sleep. It is frequently utilized in hospitals where it aids in preventing pressure sores in patients who are confined to beds for extended periods of time. Globally, demand for furniture is increasing as a result of changing lifestyles and an expanding population. The global market is anticipated to grow as a result. 

Rising Building Construction Sector

Building insulation is a major area of this expanding need. In light of the current pandemic situation on a global scale, the construction industry is currently experiencing sustainable growth, and the projection period is expected to see continued growth in the global market. Given the size of the field of sustainability in relation to building construction and the numerous steps it entails, which must be incorporated into the fundamental construction procedures. These factors mean that green buildings are unquestionably gaining ground in the building sector.

What are the main factors that will slow down the Polyurethane Market?

Environmental Concerns Related to Polyurethane

The Environmental Protection Agency (EPA) notes that polyfoam manufacturing plants could be a significant source of toxic air pollutants (source). They include 4-toluene di-isocyanate (TDI), methylene chloride, hydrochloric acid (HCl), and hydrogen cyanide (HCN). It is well known that these chemicals harm the central nervous system, the lungs, the eyes, and mucous membranes, in addition to causing cancer. Polyurethane foam contributes significantly to landfill waste. PU foam cannot decompose, so it ends up in landfills that are constantly expanding. Thus, such environmental concerns related to polyurethane can slow down the market.

What are the future opportunities for Polyurethane Market?

Increasing Energy Efficiency in Insulation Application

In addition to being used in trucks and shipping equipment, rigid polyurethane foam has an exceptional capacity to keep heat out and cool air, which contributes to its eco-efficiency. Appliances used in both commercial and residential settings, as well as other elements of the cold chain, contain polyurethane foam insulation. According to analysis, a contemporary appliance with polyurethane insulation has a 20:1 energy-saving factor. The use of polyurethanes increases the potential for energy savings, which is good for the environment. According to a study conducted by the industry, fossil fuels account for more than 40% of the energy used to heat and cool interior spaces in homes and buildings, including ones with walk-in freezers. Polyurethane insulation is used in these structures to increase energy efficiency and, as a result, reduce energy-related carbon dioxide emissions. By using polyurethane foams to make lighter, more fuel-efficient cars, automakers are contributing significantly to the reduction of carbon dioxide emissions.

Regional Analysis

Asia Pacific Dominates the Global Market

The global polyurethane market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.

Asia Pacific region is the highest contributor to the market during the forecast period. In the region, China leads the manufacturing and construction sector, followed by India. Favorable government policies and investment climate drive the growth of the construction sector. As per the data provided by Invest in India, by 2025, the construction output in India is estimated to grow at an average of 7.1% every year, and the construction sector is projected to rank third globally. Additionally, the government of India is actively working to accelerate the wheel of the construction sector. Recently, the government launched Pradhan Mantri Awas Yojana, which aims to build housing for all in urban areas by 2022. Polyurethane is used to provide flexible foam cushioning in sofas and carpets. It is used on roofs to reflect sun rays, maintain ambient indoor temperatures, and reduce the need for air conditioning. China continues to be a global leader in the automobile sector. As per CEIC Data, Chinese motor vehicle sales recorded a total sale of 309,942 units in February 2020, compared to 1,927,201 units in January 2020. Thus, the growth of the construction and automobile sectors will drive market growth during the forecast period.

Europe is expected to witness dynamic growth in the global market during the forecast period. The automobile sector is the backbone of Europe's industrial sector and contributes a large share of the region's GDP. As per the data provided by the European Commission, the automobile sector employs around 13. 9 million people and contributes about 7% to the GDP. Polyurethane plays a key role in the automobile sector and is used in manufacturing car seats, interiors, doors, spoilers, and windows. They are also used in shock absorbers to withstand mechanical and dynamic loads. Polyurethane is used for manufacturing lightweight components to increase mileage by improving fuel economy and providing insulation, sound absorption, and comfort. In Europe, there are 160 factories that produce flexible polyurethane slabstock foam, and they produce 1.5 million tonnes of foam annually. Around 22 to 24 kg of polyurethanes are used in a car, the vast majority of which is the foam that is molded into the car seats. The majority of slabstock foam is used as foam sheets, such as for headliners, and each car uses about 2.5 kg on average. The European Automobile Manufacturers Association (ACEA) estimates that 9.9 million passenger vehicles will be produced in 2021. The total annual production of mattresses in Europe is estimated by CSIL to be around 50 million units. Nearly 90% of those contain between 2 and 30 kg of polyurethane foam in their mattresses. About half of European mattress production is made up of innerspring mattresses, 40% are made of foam, and 7% are made of latex. Each year, the percentage of mattresses with polyurethane cores slowly increases.

North America is expected to witness significant growth in the global market during the forecast period due to the region's rising building construction and remodeling activities. The material is used for building roofs, attics, walls, and basements to stop air leakage and maintain building insulation. Due to increased knowledge of the energy-saving advantages of insulating buildings, particularly in areas with colder climates, the building insulation market has been expanding over the past two decades.

The LAMEA region is expected to witness moderate growth in the global polyurethane market during the forecast period. The rapid growth in construction activities in Middle-Eastern countries will increase the utilization of polyurethane in the region. The growing automobile sector in South American countries and economic development will drive the growth of the market in the region.

Segmental Analysis

The global polyurethane market share is segmented by product and end-user.

Based on the product, the global market is bifurcated into flexible foam, rigid foam, coating, and elastomer.

The rigid foam segment is the highest contributor to the market during the forecast period. Rigid foam offers a wide range of properties, such as low density, high thermal insulation, and high mechanical properties, among others. It is used in thermal insulation as a load-bearing structure material. It is extensively used in the commercial and residential sectors for its energy efficiency and high comfort. As per the U.S. Department of Energy, heating and cooling in the U.S. household account for more than 56% of the total energy used. Customers are inclined towards soundproofing indoors to reduce the effect of noise pollution, which drives the demand for rigid foams as they provide effective insulation and are used in roofs, walls, windows, and doors.

The flexible foam segment is expected to witness a higher CAGR. Flexible polyurethane foam is utilized as padding in a wide range of consumer and industrial goods, including bedding, furniture, car interiors, carpet underlay, and packaging. Almost any variety of shapes and levels of firmness can be produced using flexible foam. It is supportive, lightweight, long-lasting, and comfortable. About 30% of the North American polyurethane market is comprised of flexible polyurethane foam, which is mainly used in bedding, furniture, and the automotive sector.

Based on the end-user, the global market is bifurcated into construction, household products, transportation equipment, and electronics.

The construction segment is the highest contributor to the market during the forecast period due to the numerous advantageous properties of polyurethane foam, such as its lightness, excellent thermal insulation, chemical stability, and resistance to bacteria and insects. Increasing urbanization and industrialization, particularly in emerging economies such as China and India, and rising infrastructural activities in the Middle East are anticipated to drive the expansion of the construction industry, thereby increasing demand for polyurethane foam and insulation.

The transportation segment is expected to grow at a significant rate. Polyurethanes' (PU) significant and expanding role in a huge variety of automotive and transportation-related applications, contributing heavily to the growth of the segment. Comfort, safety, longevity, weight reduction, and design freedom are the main advantages that polyurethanes offer. Every type of transportation in the world uses PU, which also has a number of additional advantages for the industry.

Recent Developments

• April 2022, Mitsubishi Chemical partners with Origin Materials to develop carbon-negative products for tire manufacturing.
• January 2022, Eastman Chemical is investing USD 1 billion in the world's largest molecular plastics recycling facility in France.