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2021 China TPU Market Report Sample
May 11, 2022    [Source:PUdaily]

A review of China’s TPU market in 2021 and its outlook

Market review: 2021 is an unusual year for the domestic TPU industry. In the year, as the feedstocks prices skyrocketed TPU price set on an upward trajectory. After the Spring Festival holiday, the plastic limit order prompted AA and BDO prices to surge, which in turn drove up TPU price, enabling it to hit a historic high in early March. However, the rising TPU price met resistance from downstream manufacturers as it squeezed their profit margins. This, coupled with the correction in raw materials prices, put downward pressure on TPU price. In the second half of 2021, the "dual control" policy and restrictions on power consumption and production led to low industry operating rate and further decreased TPU supply. Thus the tight supply and strong demand owing to September-to-October peak season pushed up the TPU price. In November, the price declined again as restrictions on power consumption and production were lifted and demand became weak in the off season. In the year, the TPU price fluctuated greatly. Take the price of TPU for shoe materials. It ranged between RMB 17,000 and 26,000/ton, higher than in 2020. The price began the year at RMB 18,000/ton and ended it at RMB 20,000/ton, gaining 11.1% from the end of last year.

 Market outlook: Currently, the domestic TPU industry is still experiencing rapid growth. As a novel environmentally-friendly material, TPU can meet modern society’s environmental requirements and effectively replace traditional materials such as PVC, rubber, EVA and silica gel. It also plays a key role in promoting transition of China’s manufacturing industry to high-end manufacturing. In recent years, the production capacity for TPU has been expanding rapidly, while the overall operating rate has remained relatively low. In the coming years, many more new capacities are expected to come online, thus intensifying market competition. TPU has wide applications, including shoe materials, tubing, films, adhesives and cellphone cases. And the applications are likely to be further expanded. On the whole, the industry has a bright prospect. It is projected that the domestic TPU market will grow at a rate of around 10% over the next five years.

Main contents and highlights of the report

Main contents: Main raw materials for TPU; TPU capacity and output in China; major TPU manufacturers in China (sources of raw materials, target markets and product grades); China’s TPU imports and exports; TPU price and profit margin; downstream markets; market outlook.

Highlights: Unpacking the supply and demand to get a sense of the competition landscape; surveying major TPU manufacturers’ TPU capacity and output; tracking product prices to identify their determinants; analyzing applications to assess the room for future growth.

A snapshot of the report

TPU capacity and output

In recent years, China's TPU capacity has been expanding steadily. Growing a CAGR of 12.6% for the 2017-2021 period, the total capacity reached 1.157 million tons per year in 2021, up by 12.7% from prior year. Growing at a CAGR of 14.3% for the same period, the domestic TPU output reached 654,000 tons in 2021, up by 13.8% from previous year. The domestic TPU market was dominated by two leading companies and multiple big players. Wanhua Chemical and Huafon, two leading manufacturers, accounted for about 37% of the domestic TPU output in 2021. The top ten manufacturers representd about 78% of the total output in the year.

Fig. 1 Different manufacturers’ shares of the domestic TPU output in 2021

Landscape of market competition

The rapid expansion of TPU capacity had led to oversupply and increasingly fierce competition among manufacturers, though the average operating rate was only 50-60% in 2021. Indigenous firms mainly targeted low-end markets and lagged behind their foreign competitors in serving medium- and high-end markets. Thus, the low-end market had become a red ocean, while the high-end one was monopolized by foreign companies, with only leading indigenous companies such as Wanhua and Miracll Chemical capturing a small market share.

The low-end and high-end markets have distinct features. Low-end products have diverse applications and therefore widely distributed customers. And the market features big size and fierce competition. All this determines that firms with strong brand identities, low raw material costs and large customer base are able to capture bigger market shares and have greater pricing power. When it comes to high-end products, they enjoy strong demand and are produced by only a handful of Chinese manufacturers.

At present, there are approximately 100 TPU manufacturers in China. Integrating value chain and focusing on R&D and manufacturing are the two major competitive strategies adopted by major players. The first strategy is adopted by companies such as Wanhua, Huafon, Inov, BASF, Huntsman, Covestro and Lubrizol, which enjoy low costs from a long value chain, covering MDI, polyester polyols and adipic acid. Some of them even expand into downstream sectors. The second strategy is adopted by manufacturers such as Miracll Chemical and Jintang Plastic Technology, which rely on technological innovation and specialized services as the driver of their growth. Growing rapidly, these companies boast unrivalled technological capabilities in specific market segments. The remaining small firms are less competitive, with technologically backward products for narrow applications, and safety and environmental issues at their manufacturing sites.

Downstream markets

Growing at a CAGR of 12.9% for the 2017-2021 period, the domestic TPU consumption amounted to about 602,000 tons in 2021, up 11.6% from prior year. The shoe material sector remained the largest consumer of TPU in China, accounting for about 28% of the total consumption. Tubing, films, adhesives and cellphone cases were also major consumers. Although TPU consumption by wires and cables, wearables and medical industries remained low, there is huge growth potential in these sectors.

Catalogue of 2021 China TPU Market Report

1.  Profile of TPU 

1.1 Properties and applications of TPU    

1.1.1  Physical and chemical properties 

1.1.2  Applications

1.2  Types of TPU

1.2.1  Polyester-based TPU and polyether-based TPU

1.2.2  Aromatic TPU and aliphatic TPU

1.2.3  Conventional TPU and specialty TPU

1.3  Development of TPU production process and technology

1.3.1  A review of the development of TPU production process     

1.3.2  Technology introduction and development   

2.  An overview of raw materials markets in China    

2.1 Main raw materials for TPU  

2.1.1  China's pure MDI market    

2.1.2  China’s adipic acid market  

2.1.3  China's BDO market    

2.2  Other raw materials

3.  Supply of TPU in China

3.1  China’s TPU capacity and output 2017-2021

3.2  Major TPU manufacturers in China in 2021

3.2.1  Wanhua Chemical

3.2.2  Huafon

3.2.3  Inov     

3.2.4  Miracll Chemical

3.2.5  BASF

3.2.6  Huntsman    

3.2.7  Lubrizol      

3.3  New and expansion projects in China

3.4  China’s TPU imports in 2021  

3.4.1  China’s polyurethane in primary form (including TPU) imports in 2021    

3.4.2  China's TPU imports in 2021

3.5  China’s TPU exports in 2021

3.5.1  China’s polyurethane in primary form (including TPU) exports in 2021             

3.5  China's TPU exports in 2021  

4.  China’s TPU price and profits in 2021

4.1 Price movement of TPU in China in 2021

4.2  Profit margin of TPU in China in 2021   

4.3  Factors influencing TPU prices in China 

5. TPU demand from different downstream sectors in 2021

5.1  An overview of downstream markets in China

5.2  Downstream markets in 2021 

5.2.1  Shoe materials     

5.2.2  Tubing

5.2.3  Films   

5.2.4  Adhesives

5.2.5  Cellphone cases   

5.2.6  Synthetic leather 

5.2.7  Electric wires and cables     

5.2.8  Wearables    

5.2.9  Caster wheel

5.2.10  Healthcare 

5.2.11  Other sectors

6.  Market outlook 2022-2026     

6.1  Forecast of TPU supply in China for 2022-2026

6.2  Forecast of TPU demand in China for 2022-2026

 

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