Polyether Polyols Market size is forecast to reach $15 billion by 2025, after growing at a CAGR of 5.5% during 2020-2025. Increased use of polyurethane foam in the construction and automotive industries is a major driver of global demand for polyols during the forecast period. In addition, the growing production of APAC refrigerators and freezers is another factor driving the demand for polyols. Polyol-based rigid foam is commonly used in domestic and industrial refrigerators due to its properties, such as minimal structure, light weight and cost-effectiveness. It is used as a raw material in the manufacture of polyurethane foams used in various applications in the construction and automotive industries. Polyurethane foams are primarily used in the manufacture of furniture, carpets, car seats and others. The rising demand for these products due to the high growth of the construction and automotive industries in the developing countries of APAC is expected to drive the polyols market.
Polyether Polyols Market Segment Analysis – By Type
Polyurethane foam application held the largest share in the polyether polyols market in 2019, owning to rising demand for rigid and flexible polyurethane foam in numerous applications. Polyether Polyols react with di-isocyanates to create polyurethane foam. The market for rigid polyurethane foam is mainly driven by increased use in the building and construction industry as it possesses strong insulating properties and ensures uniform temperature stability. The market for flexible polyurethane foam is growing in various applications, such as furniture, flooring, automotive and packaging, due to superior properties such as light weight, longevity, comfort and resilience. Due to the growing need for modern architecture and the government’s expenditure on construction activities, the expanding construction and construction industries are expected to increase demand for polyurethane foam and hence, polyether polyols. In addition, the rising preference for energy-efficient buildings to minimize carbon emissions is expected to fuel demand for rigid polyurethane foam at a substantial pace during the forecast period.
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Polyether Polyols Market Segment Analysis – By Application
Construction held the largest share in the polyether polyols market in 2019 and is growing at a CAGR of 5.8% over forecast period. As polyether polyols have strong insulating properties and provide uniform temperature stability, they are increasingly used in the building and construction industries. In addition, it is expected that a rising preference for energy-efficient buildings to minimize carbon emissions would generate lucrative opportunities over the forecast period. Construction industry is followed by automobile industry. In the automotive industry, polyether polyols are widely used in automotive interiors such as acoustic modules, seats, steering wheels and back-foam instrument panels and doors.
Polyether Polyols Market Segment Analysis – Geography
APAC held the largest share in the polyether polyols market in 2019 up to 30%, owning to the growing construction, automobile, and electronic & electrical industries in the region, due to increasing consumer spending and raising income levels. Polyols are widely used for the manufacture of building panels, windows, car seat foams, doors furniture and carpets used in the construction and automotive industries. The growth in infrastructure projects is mainly due to an expanding population, resulting in the need for more residential and commercial buildings for various purposes. Construction projects such as ‘100 smart cities’ and ‘Housing for All by 2022’ in India are influencing polyols chemicals demand. In addition, in 2019, China government invested 1.9 billion on 13 public housing projects. Therefore, rising construction in these countries are driving polyether polyols market growth in Asia Pacific region.
Polyether Polyols Market Drivers
Growth of automotive and construction industries
Polyols are used in the manufacture of polyurethane. The automotive and construction industries are the main end-users of polyurethane foam. Flexible polyurethane foam is used in vehicle seat cushions. These foams are available in a variety of firmness and shapes to meet the needs of the seating. According to OICA, the production of light commercial vehicles has augmented by 10.2 % in 2018 in the APAC region. According to the International Trade Administration (ITA), China is the world’s largest vehicle market and the Chinese government is expecting that automobile production will reach 35 million by 2025. This will further support polyether polyols market. In addition, for efficient temperature control, polyurethane rigid foam is used in the insulation of walls, roofs, panels, and doors. According to study, about half of the energy used in the life of buildings is expended on heating and cooling in the United States. According to a report by the US Department of Energy, 40 per cent of energy is used by residential and commercial buildings. Efficient insulation in buildings can also lead to less energy consumption, thus leading to the reduction of carbon emissions. In addition, the demand for rigid polyurethane foam for construction is boosted by energy conservation laws and regulations regarding energy efficient buildings. Polyurethane foam is an optimal insulation choice, contributes to considerable energy conservation and therefore allows CO2 emissions to be reduced. The rising demand for polyurethane foams from the construction and automotive industries is therefore driving the demand for polyether polyols.
Polyether Polyols Market Challenges
Fluctuating raw materials cost
Major intermediate chemicals or raw materials such as propylene oxide, ethylene oxide, adipic acid and carboxylic acid are used for the manufacture of polyurethane polyols. Any variation in the cost of these essential raw materials directly affects the final polyurethane products in the supply chain. The majority of these raw materials are derivatives based on petroleum and are susceptible to commodity price fluctuations. The prices of oil have been highly volatile. Increased market demand and global instability in the Middle East over the last few years have been largely responsible for this. Volatility in crude oil pricing has resulted in supply constraints for ethylene oxide and propylene oxide. As the basic raw materials for polyols are extracted from the basic constituent crude oil, any price increase would decrease the margins of the producers of polyols, which could lead to a price increase. Thus, the price volatility of raw materials is the major challenge of the polyols market.
Market Landscape
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Polyether Polyols Market. In 2019, the market of Polyether Polyols Market has been consolidated by the top five players accounting for xx% of the share. Major players in the Polyether Polyols market includes BASF SE, Covestro AG, Royal Dutch Shell Plc, The Dow Chemical Company, Mitsui Chemicals, Wanhua Chemicals Group, LANXESS AG, Huntsman Corporation, Stepan Company, Repsol SA, among others.
Acquisitions/Technology Launches
In April 2019, BASF SE has partnered with Azelis Americas, LLC to sell its polyurethane products in the USA and Canada. This partnership would help the company develop its sales channel in these two countries.
In March 2019, Covestro AG has partnered with Genomatica, a US-based biotechnology firm, in the research and production of high-performance materials based on renewable polyols. The goal of this partnership is to reduce carbon emissions and use fossil-based resources.
In January 2019, Wanhua Chemical Group has signed a new agreement with Brenntag Specialties, Inc., part of the Brenntag Group, for the distribution in the United States of aromatic isocyanates, polyether polyols, coating additives and polyurethane dispersions.
Key Takeaways
Asia Pacific dominates the polyether polyols market, owing to the increasing manufacturing & construction activities in the region due to various government initiatives such as 100 smart cities and Housing for all by 2022 in the region.
In addition, factors such as rising demand for industrial lubricants, a booming automotive industry coupled with aggregating demand for flexible foam and growing demand from the infrastructure industry have strengthened the growth of the global polyether polyol market.
Moreover, the advent and growing popularity of bio-based polyether polyols has expanded the usage of polyether polyols for use in newer industries.
However, factors such as strict environmental regulations for the manufacture of polyurethane polyols and unpredictable raw material prices limit demand growth over the forecast period.
However, operations in various industries such as construction, automotive, and so on is being significantly affected due to the COVID-19 epidemic, as most of countries have issued “stay at home guidance” i.e., lockdown. And it is expected that the outbreak of COVID-19 will be seen in the whole year of 2020, and a few months in 2021. This is limiting polyether polyols market growth.
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