Dublin, Nov. 09, 2022 (GLOBE NEWSWIRE) -- The "Polyurethane Chemicals and Products in Europe, Middle East and Africa (EMEA) - 15th Edition 2022 (including Raw Materials Volume)" report has been added to ResearchAndMarkets.com's offering.
The market for polyurethanes has experienced several challenging years in the EMEA region. Production declined by 6.9% in 2020 but recovered somewhat in 2021. Current economic and political issues are slowing down growth in 2022 and future development is heavily dependent on the inflation rate and consumer spending. Pre-pandemic production is not expected to be regained until 2024. Growth rates should return to 23% p.a. by 2023, if the situation does not worsen from the time of publication.
Historically, flexible foam has been the largest end-use segment, but due to slow growth rates in recent years, rigid foam is now the largest market for PU products in EMEA. Both product types together represent 66% of the overall market.
The total production of polyurethane products in the EMEA region was 6.23 million tonnes in 2021, representing an increase of 2.9% compared to 2020. The COVID-19 pandemic, price increases and economic concerns prevented a faster recovery from the challenging year in 2020. High inflation rates and uncertainty in energy markets remain big issues in the PU industry, hence growth for 2022 is expected to be low at just ~0.6%.
The overall market for 2022 is expected to remain relatively static, mainly due to issues surrounding the ongoing conflict in Ukraine and effects from the COVID-19 pandemic.
The high inflation rate and high energy prices are also serious concerns for the industry this year. Market growth is expected to pick up again from 2023, but this could change rapidly given the fluidity of the current situation.
All regions experienced a growth in production in 2021, with Africa showing the highest growth rates and Western Europe the lowest. The African PU market was specifically impacted by the crisis in 2020 and the higher growth in 2021 was mainly caused by catch-up effects. For the next five years, the Middle East is projected to grow the fastest, followed by Africa and Central Europe. The development in the Eastern European market is strongly connected to the outcome of the ongoing conflict between Russia and Ukraine.
The situation in 2020 put polyol producers under immense pressure as the COVID-19 pandemic took hold. The low oil price should have been ideal for production, but demand remained low. This situation changed towards the end of 2020 and through 2021, when demand increased considerably and overall demand from polyurethane producers could not be met, causing prices to rise. Prices have remained high in 2022 due to soaring energy prices and high costs for precursors. The long-term effects of the war between Russia and Ukraine are difficult to estimate, but the years 2022 and 2023 are expected to remain challenging for supplies of feedstocks such as propylene oxide.
Sustained high demand will likely keep raw material prices high through to the end of 2022 at least. Inflationary pressures and the supply situation are the main threats to market growth this year.
The development of renewable polyols will heavily depend on changes in government legislation or subsidies. It will, however, be difficult for producers to stay competitive. Prices for conventional polyols are currently high but without legislative pressure market penetration will remain limited in the short term.
Total EMEA production of polyurethane flexible foam was 2.03 million tonnes in 2021, an increase of 2.2% compared to the previous year. After small declines in both 2018 and 2019, flexible foam production contracted significantly in 2020 amid the fallout from COVID-19 as lockdowns across the region brought industries to a standstill in many cases. All regions saw a downturn in production, although the worst affected were Africa and Western Europe.
2021 was not as positive as initially expected due to the breakdown in the global supply chain. Comfort foams performed relatively well in 2021; however, foams used in automotive applications continued to suffer as issues with vehicle production were exacerbated by the global semiconductor chip shortage.
The flexible foam market in EMEA is relatively mature. Western Europe is the largest producer, followed by Central Europe then Eastern Europe, with the latter two regions’ furniture industries being very important. Africa and the Middle East also produce significant quantities of flexible slabstock since the production process is relatively simple.
Short to medium-term growth in the flexible foam industry is highly uncertain because of current political and economic issues, as well as the Russia-Ukraine war. High inflation rates are anticipated to further decrease spending power and confidence. High raw material prices and limited availability could also contribute negatively to future developments.
PU rigid foam production in EMEA increased by 3.8% in 2021 to reach 2.09 million tonnes. Rigid foam remained the largest product segment in the EMEA region followed by flexible foam. This is primarily due to the construction market regaining its momentum in 2021, as well as increased awareness of the benefits of using PU for thermal insulation.
Rigid foam was the fastest-growing product segment in the EMEA region in 2021, owing to the swift recovery of the construction industry compared to other industries. However, increased prices of raw materials are likely to hamper the demand going forward. Nevertheless, the analyst is forecasting that the rigid foam sector will surpass 2019 production levels in 2022.
Due to rising economies and their impact on downstream industries such as construction and appliances, rigid foam output increased in all regions in 2021. The average regional growth was 3.79% from 2020 to 2021.
The EMEA region produced 874,000 tonnes of polyurethane coatings in 2021, representing a slight increase of 2.5%. The industry had shown steady growth in the years up to 2019, but that was brought to an abrupt halt by the fallout from the COVID-19 pandemic, particularly its impact on the automotive industry. The industry developed well in 2021 because of increasing infrastructure and construction activities in several countries across the region.
The biggest end-use categories in the region for PU coatings are wood and furniture coatings, industrial coatings and maintenance coatings. Transport is also a large sector if all uses such as auto OEM, auto refinish, commercial vehicle and marine coatings are taken together.
The EMEA region produced 420,800 tonnes of polyurethane adhesives and sealants in 2021, representing a slight increase of 2.0% compared to the previous year. Adhesives represent 75% of production, and sealants the remaining 25%. Flexible packaging adhesives represent the largest product category within PU adhesives and sealants, accounting for ~32% of production, followed by construction adhesives with 25%.
The market is mature and most growth depends on product substitution, so there is limited opportunity for exponential growth rates. The industry is characterised by large established suppliers, large volumes and limited growth rates.
Production of polyurethane elastomers in the EMEA region stood at approximately 580,000 tonnes in 2021, which reflects an increase of 3.8% compared to 2020. The market is expected to grow slowly until 2023, then pick up again from 2024 onwards. Most end-use segments experienced growth, but production of RIM/RRIM further declined due to the weak automotive industry and product replacement. Footwear elastomers represent the largest end-use segment, followed by TPU and cast elastomers. Germany, Turkey and Italy are the countries with the highest production output in EMEA.
The market for binders remained relatively static in the years up to 2020, with estimated growth rates between 1-2% per annum. The market is strongly connected to the cost and availability of MDI.
The outbreak of COVID-19 impacted the binders market, causing production to contract by 6% in 2020. The recovery in 2021 was not as significant as expected, with modest growth of 1.9% to take production to ~240,000 tonnes. The use of MDI binders is a consumer-driven, price sensitive market, and high PU raw material prices hindered the industry’s rebound following the contraction in 2020. The market was also affected greatly by the price of wood, which has skyrocketed since the home renovation boom in 2020.
The Russia-Ukraine war, and global supply-demand dynamics and supply chain issues, are expected to stunt production further in 2022, resulting in a small decline. However, potential restrictions on the use of urea formaldehyde binders may propel demand in future years.
The data in this eight-volume report include raw material consumption by product type, by region, by country and by major end-use industry. The Raw Materials volume contains comprehensive supply and demand data for all the major polyurethane raw material types. The Major End-Use Markets volume contains an overview of the major markets for PU products and a summary of trends and drivers.
The information contained within this report is based upon an extensive programme of interviews throughout the industry. The report contains both PU product production and raw material consumption figures, with 2021 as the base year and market forecasts provided to 2026.
A selection of companies mentioned in this report includes:
Royal Dutch Shell plc
For more information about this report visit https://www.researchandmarkets.com/r/w9qdp2
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