During the period from 2020 to 2024, the combined propylene oxide (PO) capacity in Japan and South Korea remained relatively stable at around 1 mtpa, with no new capacity additions. The capacity was mainly originated from five facilities belonging to leading local producers such as S-Oil, SKC and Sumitomo. These producers not only meet the domestic PO demand in Japan and South Korea but also exported a portion to other markets such as mainland China and Taiwan, showcasing their significant position in the global PO market.
In terms of demand, the primary downstream product of PO in Japan and South Korea is polyether polyol, accounting for as much as 60-70% of the total demand. Polyether polyol, a crucial derivative of PO, finds broad applications across various industries. However, the market outlook for polyether polyol in Japan and South Korea in the coming years is not positive.
Japanese polyether polyol market is forecast to grow at a CAGR of 0.8% between 2025 and 2029. The slow growth is attributed to several factors. Firstly, there is insufficient infrastructure improvements in the Japanese automobile sector, and the government support is limited, dampening the demand for polyether polyols in the automobile industry. Secondly, the upholstered furniture industry remains subdued due to weak consumer purchasing power. It also leads to sluggish growth in polyols demand. Furthermore, the home appliance sector is becoming saturated, further constraining the growth potential of polyether polyol market.
In South Korea, the polyether polyol market is similarly bleak. The market size is predicted to expand at a 0.02% CAGR over the projected period. Korean economic downturn and low demand weigh on the polyols market. The government recently lowered its 2025 growth forecast to 1.8% from 2.2%, reflecting the challenges and pressures faced by the country. Soft domestic and export demand exacerbates the predicament of the polyols market.
PO demand in Japan and South Korea reached xx tonnes in 2024, according to PUdaily. However, the CAGR from 2020 to 2024 stood at only xx%, indicating relative stability but lackluster growth in the PO market.
Looking ahead to 2025, it is anticipated that there will be no significant changes in the PO supply landscape in Japan and South Korea. The market is currently still dominated by five suppliers including S-Oil, SKC, Asahi Glass, Tokuyama and Sumitomo, with no immediate plans for capacity expansion or new installations.
In terms of the macro environment, IMF predicts that Japan’s economic growth will remain at a low level in the coming years, which will negatively impact the demand for PO and its downstream products. Similarly, South Korea faces numerous challenges. The downward revision of economic growth outlook as well as the subdued domestic and export demand will pose adverse effects on the PO market.
In conclusion, PO demand in Japan and South Korea is forecast to remain subdued, potentially registering a CAGR of xx% over the next five years. The forecast reflects various fundamentals such as economic environment, industrial policies, and consumer demand in these two countries. It is essential to closely monitor market dynamics, adjust production strategies, and adapt to potential market changes in the future.
<Asia Pacific PO Market Report 2024> and other global polyurethane market research reports published by PUdaily provide real-time, accurate and integrated industry data and market trend analysis for practitioners in the polyurethane industry. They serve as a valuable reference for investors and business strategists, enabling them to grasp market trends, make informed decisions, and collectively promote the high-quality and sustainable development of the polyurethane industry.
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