Chinese CASE Market Update

PUdaily, Shanghai-According to data from PUdaily, China's PU CASE (Coating, Sealant, Adhesive, Elastomer only for TPU) consumption is around 2.5 million tons in 2015, which accounts for over 30% of the entire polyurethane products in China. It is expected that demand for PU CASE will be more than 2.7 million tons in 2016, a CAGR of 7.8% compared to 2015.

The State Council has adjusted GDP growth target to 6.5-7% for 2016, as the long-term accumulation of contradictions and risks show that economic growth is shifting, structure adjustment pains, old and new economy momentum intertwines and economy downward pressure increases. PU CASE industry will likewise adjust and upgrade. Nevertheless, with China's ongoing economic structural reform and urbanization, the application and proportion of polyurethane CASE products will continue to expand in building energy saving, automobile and textile industries.

Table 1 PU CASE Volume in 2015 and 2016 (Million Tons)

(1) Coating
The total volume of PU coating products is over 1.6 million tons in 2015. The wood coating market, as the biggest market for PU coating in which more than 70% wood paints use PU-based coatings, shows weak growth by the impact of overcapacity, the growth rate could be 3% in 2016. However, more powerful growth engine for PU coating will be automotive-refinishing coating, floor coating and industrial anti-corrosion coating market with an average 10% annual growth rate for few years. What’s more, the application ratio for PU coatings will keep rising significantly in the future, quoting from sources in coating industry. Accordingly, a CAGR of 6.3% for PU coating is expected.

Table 2 PU Coating Volume in 2015 (Million Tons)

(2)Adhesive and Sealant (AS for short)
PU adhesive and sealant products are nearly 0.6 million tons in 2015. They are widely used in various industries – shoes adhesives, composite film adhesives for packaging and tape adhesives are all PU-based in developed countries. And the development target of The 13th Five-Year Plan (2016-2020) for adhesive and sealants in China is an average growth rate of 7.8% for outputs, 8.3% for sales volume. Thus, by the end of 2020, the total yield of AS in China will be up to 10.3 million tons, and the sales volume will be RMB 132.8 billion. It is estimated the consumption of PU adhesive and sealant in 2016 will rise around 10%.

(3)Elastomer (only for TPU)
After more than 20 years development in China, TPU elastomer industry has been expanding for recent years with an average growth rate of 10%, especially for shoes material, PU film and PU pipe industries. TPU production capacity keeps further expansion and new capacity will continue to release in the next few years. Under the background of fierce market competition, the average annual growth rate for TPU can still remain at about 8-13%.

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