China PU Update

China Polyurethane Products Output Dropped 5.5% YoY to 12 Million Tonnes in 2022

PUdaily | Updated: July 25, 2023

In 2022, the global economy experienced a sharp slowdown due to multiple challenges such as the Russia-Ukraine conflict, the European energy crisis, the pandemic, inflation, aggressive interest rate hikes by the Federal Reserve, and significant depreciation of non-US currencies. The rapid decline in the manufacturing sector further incubated the weaker prospects for global economy.

As a new type of high-performance synthetic material, polyurethane products have significant importance in promoting China’s low-carbon economy and improving the living standards of its residents. Polyurethane (PU) is widely used in various industries related to clothing, food, housing, and transportation due to its outstanding properties. Within the complex and volatile economic context, China, being both the largest producer and consumer of polyurethane products, experienced notable impacts on both the production and demand sides. China’s PU products output in 2022 totaled roughly 12 million tonnes, representing a year-on-year decrease of 5.5%, according to Pudaily. The compound annual growth rate from 2018 to 2022 was 1.4%.

PU products mainly include foam plastics, elastomers, fiber plastics, fibers, leather shoe resins, coatings, adhesives, sealants and others. Foam plastics make up the largest proportion among them. PU foam plastics can be divided into rigid foam and soft foam systems, which have excellent elasticity, elongation, compression strength, and flexibility, as well as excellent chemical stability. Moreover, PU foam plastics also possess superior processability, adhesive properties, and insulation properties, making them high-performance cushioning materials.

PU soft foam products are mainly used for furniture cushions, mattresses, car seat cushions, composite fabrics, packaging materials, and soundproofing materials and more. In 2022, China’s PU soft foam products output reached 2.49 million tonnes, a year-on-year decrease of 10.9%.

The upholstered furniture industry is the largest downstream sector of PU soft foam, with a share of 48.8% in 2022. The consumption of PU soft foam products in the furniture industry contracted significantly in 2022 due to the downturn in the building materials and real estate sectors.

PU rigid foam products are mainly used in refrigerators, freezers, pipelines, spraying foam, panels, containers, etc. In 2022, China’s PU rigid foam products output amounted to 1.96 million tonnes, a decrease of 8.1% compared to the previous year. The refrigeration industry took up the largest share in the PU rigid foam products, accounting for 56.5% of the total output in 2022. Due to factors such as COVID-19 recurrences, changes in the supply chain, and a decline in economic growth, as well as the high ownership and low replacement frequency (a refrigerator’s service life is around 10 years), the decline of the real estate dividend, soft demand caused by low consumer confidence, and high inflation, wars, and interest rate hikes in many European and American regions, the overseas demand for refrigerators shrank in 2022. Furthermore, due to the high base in 2021, China experienced a significant decline in both domestic sales and export of refrigerators.

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