An Overview of the Global Market for Polyols 2022 - First Edition

Executive Summary

This new four-volume study updates the information included in the analyst's previous studies on aliphatic polyester polyols and aromatic polyester polyols published in 2019 and includes two brand new reports on polyether polyols and eco-friendly polyols. Data in this report has been extensively revised through a lengthy programme of primary and secondary research during 2022. 

This report contains data on the 2022 consumption of aliphatic and aromatic polyester polyols, as well as polyether and eco-friendly polyols, and forecast consumption for 2027 (eco-friendly up to 2032) split by the three major geographic regions (Americas, EMEA and Asia Pacific). 

Aliphatic Polyester Polyols

Asia, and China in particular, is by far the largest global producer and consumer of aliphatic polyester polyols, of which the vast majority is used in the manufacturing of PU elastomers for applications such as footwear and synthetic leather. 

Production of polyester polyols in Asia Pacific is mainly for captive use by shoe sole resin and synthetic leather resin manufacturers. Additional demand comes from cast elastomers and TPUs, as well as in the manufacture of polyester slabstock. 

The production of adipic acid and its availability heavily influences aliphatic polyester polyol production. Adipic acid is one of the most commercially important types of aliphatic dicarboxylic acid, with the majority of demand for it coming from the production of industrial fibres, especially nylon 6,6 resin. Most adipic acid production capacity is derived from cyclohexane, and the rest is mainly from cyclohexene and uncoupled cyclohexanol/cyclohexanone.

The production of aliphatic polyester polyols was affected by raw material supply issues throughout 2021 and 2022. There were well-reported problems with the availability of MDI, but also glycol-specific issues with the availability of hexane diol and monopropylene glycol (MPG). 

The CAGR for aliphatic polyester polyol consumption is expected to be 5% p.a. through 2027, with the highest growth coming from Asia.

Aromatic Polyester Polyols

The demand for aromatic polyester polyols is predominantly linked to the production of polyurethane rigid foam insulation (including refrigeration). Increasingly, the global market is driven by performance, legislation and higher fire-rated product requirements, for which aromatic polyester polyols are a crucial component. 

This whole sector has in the last couple of years been adversely affected by raw material issues, namely MDI prices and availability, which has resulted in many end users choosing alternative insulation materials instead of polyurethane-based products. However, after the global pandemic, 2021 started to see a recovery in the market, which was again impeded by the adversities of the Russia-Ukraine war. The global optimism in the industry from 2021 and into early 2022 has been replaced by concerns in terms of energy prices, spending confidence and general global uncertainty.

The demand for aromatic polyester polyols did not decline as much as other raw materials in 2020, mainly thanks to strong demand in North America. 2021 was a good year in terms of demand; however, sales slowed down again in 2022. The forecast is highly uncertain, but it is expected that global growth rates from 2021 will again be reached in 2024.

Due to the majority of aromatic polyester polyols being used in rigid foam applications, the largest demand can be seen in the Americas, followed by EMEA and APAC. The five-year CAGR is predicted to be 3.6%.

Polyether Polyols

APAC is by far the largest consumer of polyether polyols, with 52% of global consumption. 

The global market for standard polyether polyols is expected to grow by 3.6% annually from 2022-2027, with APAC showing the strongest growth. However, high historical growth rates are not expected to be achieved again due to market saturation, stagnation of the economy and price increases. Western Europe shows the slowest growth, which is caused by economic uncertainty, the maturity of the market and ongoing issues within the automotive industry (CAGR 2022-2027: 1.9%).

North America and Asia showed the strongest growth, while the market in Eastern Europe performed particularly badly. After a strong year in 2021, growth rates slowed down again, which is mainly caused by economic factors surrounding the effects of the COVID-19 pandemic and the war in Ukraine.

Approximately half of the demand in tonnes for polyether polyols comes from flexible foam products, with mattresses, furniture and automotive being the main end uses. Other important segments are elastomers and rigid foam. 

Propylene/ethylene oxide is the main feedstock for polyether polyols, and polyol pricing is generally strongly linked to the propylene market and crude oil, although slightly delayed.

Eco-Friendly Polyols

Polyurethane raw materials are heavily dependent on crude oil prices, particularly polyols, where the price structure is based on propylene. The implementation of eco-friendly polyols can reduce price volatility to some degree; however, most options are not yet able to compete with conventional polyols in terms of price and quality.

In general, recycling and the circular economy are becoming a key topic globally and there is a lot of movement in the production of polyurethanes and other single-use plastic products. The market is expected to change considerably over the next years and there are several strategies to tackle this issue. The end goal is to produce climate neutral products without the use of fossil fuels; we are only at the beginning of this process and complete carbon neutrality and zero waste in the PU industry will take many more years to achieve.  

The market for eco-friendly polyols stagnated somewhat in recent years, mainly caused by the effects of the COVID-19 pandemic and war in Ukraine. However, it is thought that the market will grow quickly in the next ten years, although it is highly uncertain which will be the dominating technology.

Eco-friendly polyols have been available for several years now; however, low oil prices and low demand from foamers have hindered the faster uptake of these alternative materials. Most eco-friendly polyols are also relatively costly and have experienced issues with stability, consistency, functionality, viscosity, and a dark and inconsistent appearance.  

Nevertheless, the demand for eco-friendly polyols has regained big interest recently and growth is expected to accelerate rapidly in the next ten years. This is due to a general push for sustainability and greater awareness of various technologies.

This report covers 3 different scenarios, including standard scenario (chart below), carbon tax scenario, and carbon tax and incentives scenario from 2022-2023.

Methodology

Information provided in these reports are based on existing in-house data and an extensive programme of interviews with leading product manufacturers, trade associations, distributors and raw materials producers involved with the specific market researched. These interviews are conducted within the 3-6 months leading up to the publication of the study, with the duration of the research programme and the number of interviews completed depending on the scope of the study. The analyst publishes both regional and global reports, and in most cases, the interviews are conducted in the native language of the individual respondents.

In addition, published data and statistics are also reviewed in order to produce as accurate figures as possible for size of markets studied. Market forecasts are based upon industry and economic forecasts as well as upon other relevant commercial and technical issues likely to affect individual market sectors and products, as well as the interviews conducted for the study.