Main contents and highlights of the report

Main contents: Major raw materials for PUDs; PUDs capacity and output in China; landscape of market competition; downstream markets; and market outlook.

Highlights: Analyzing the supply and demand to get a sense of the competition landscape; surveying major manufacturers’ capacities and output and PUDs applications; and analyzing downstream markets to assess the room for future growth.

A snapshot of the main contents and highlights of the report

PUDs capacity and output in China

China's PUDs market is growing rapidly owing to the government's increasingly strict environmental regulation. Downstream adhesives, artificial leather and coatings manufacturers move up and upstream raw materials manufacturers move down the value chain to foray into PUDs market.

In 2021, China’s PUDs capacity totaled 511,800 tons. The top five manufacturers by production capacity were Wanhua, Scisky, Huafon, Covestro and SiwoChem, with an annual capacity of 64,200 tons, 50,000 tons, 50,000 tons, 35,000 tons and 34,000 tons, respectively. The year saw no additional capacity for PUDs in China.

Most manufacturers kept their operating rates low for two reasons. The first is their immature production processes and the impact of COVID-19. The second is the limited demand versus their large design capacities resulting from their optimism about the huge growth potential for the market. In 2021, the industry operating rate in China stood at only XX %.

Table 1 Domestic PUDs manufacturers’ production capacities and operating rates in 2021 (in 10,000 tons)

In 2021, China’s PUDs output totaled xx million tons. The top five manufacturers by output were Wanhua Chemical, Covestro, SiwoChem, Scisky and Huafon, with an output of xx million tons, XX million tons, XX million tons and XX million tons, respectively.

China imported PUDs mainly from Covestro, DSM, Dow and BASF. And the remaining imports were from Japanese manufacturers. The quality of imported products is more stable than that of domestically-produced products. In 2020, the rampant COVID-19 pandemic affected the operation of foreign plants and transportation, which in turn impacted China’s PUDs imports.

Table 2 Domestic PUDs manufacturers’ output in 2021 (in 10,000 tons)

 Landscape of market competition

Although industrial production of PUDs began in the 1970s, the industry is still in its infancy. With low technical barriers, the PUDs industry has attracted a lot of entrants in the context of increasingly strict environmental regulation. Upstream raw materials manufacturers move down and downstream adhesives, artificial leather and coatings manufacturers move up the value chain to foray into PUDs market. Presently, there are a fair number of PUDs manufacturers in China. Wanhua, Covestro, Scisky, Huafon and SiwoChem are the top five manufacturers by both capacity and output, with their combined capacity accounting for XX% of the national capacity and their combined output making up XX % of the national output in 2021. Wanhua’s PUDs products play a dominant role in xx market; Covestro’s products play a dominant role in xx market; Scisky and Huafon’s products play a dominant role in xx market; and SiwoChem’s products play a dominant role in xx market.

The top five firms’ combined output as a share of the national output was higher than their combined capacity as a share of the national capacity because large manufacturers kept their operating rates (XX%) higher than small ones’ rates (XX%).

According to our survey of 18 PUDs manufacturers, domestic PUDs producers’ capacities were mainly located in East China, followed by South and North China. Specifically, East China accounted for XX% of the surveyed firms’ total capacity. South China, North China and Sonthwest China accounted for xx%, XX% and XX%, respectively. In East China, PUDs capacities were mainly located in Zhejiang, Shanghai, Anhui and Shandong; in South China, the capacities were mainly located in Guangdong; in North China, the capacities were mainly located in Beijing; in Sonthwest China, the capacities were mainly located in Sichuan.

 Downstream markets

PUDs display environmental-friendliness, flame retardance, safety, reliability, excellent mechanical properties, good compatibility and being easy to modify. This enables them to be widely used in synthetic leather, leather finishing agents, coatings, adhesives, gloves, fabric coatings, finishing agents, papers, surface treatment agents and so on.

Although there is huge growth potential for PUDs market, the current PUDs consumption in China is not high. Presently, synthetic leather and leather finishing agents are the biggest consumers, followed by coatings and adhesives. The technological bottlenecks, high costs and immature production process all undermine PUDs products’ market competitiveness. The obstacles to increasing PUDs’ market penetration are as follows:

(1). Chinese manufacturers lag behind their foreign competitors in key additives and waterborne technologies, which are essential to ensure stable waterborne dispersion system and high solid content in synthesis, and high performance of polyurethane resins and rapid evaporation of water in applications. PUDs have drawbacks, such as poor water resistance, solvent resistance, weather resistance and cold resistance, slow curing rate, weak initial adhesion and not easy to dry. The challenge in developing PUDs is ensuring their hydrophilia to help polyurethanes disperse in the water to form uniform emulsion while improving their water resistance.

(2). With limited sources of raw materials, the costs are high (generally, 2 to 3 times the costs of oil-based polyurethane resins and increasing the costs of coatings by 50%), scaring off customers.

(3). Requirements for applications are strict. On-site applications are complex and therefore make high demand on workers’ technical skills.

In 2021, PUDs consumption in China amounted to XX million tons, of which XX million tons were consumed by synthetic leather and XX million tons by leather finishing agents. They are followed by coatings and adhesives, which consumed XX million tons and XX million tons of PUDs, respectively. In 2020, the surging demand for medical gloves as a consequence of the COVID-19 pandemic led to rapid growth in PUDs consumption by this sector. In 2021, as the pandemic was largely brought under control, PUDs consumption by gloves dropped from 2020. Other applications include fabrics, papers, inks, surfactants, fiberglass and personal care.

Table 3 PUDs consumption by different downstream sectors in China in 2021 (in 10,000 tons)

 Catalogue of 2021 China PUDs Market Report

1. Profile of PUDs  

1.1Definition of PUDs     

1.2Classification of PUDs       

1.2.1Classification by particle size and appearance 

1.2.2Classification by charge properties of hydrophilic groups

1.2.3Classification by product packaging

1.2.4Classification by waterborne method       

1.2.5Classification by PU raw materials

1.2.6Classification by structure

1.3Comparison of waterborne polyurethane resins and other waterborne resins

1.4Production process     

1.5Factors influencing properties of PUDs       

1.6Policies      

2. An overview of raw materials markets     

2.1Isocyanates market     

2.1.1Pure MDI market

2.1.2 TDI market

2.1.3 HDI market    

2.2Polyols market   

2.2.1Polyether polyols market 

2.2.2Polyester polyols market 

2.3 Other raw materials  

2.4 PUDs manufacturers’ bargaining power over raw materials suppliers

3. Supply of PUDs in China  

3.1 Production capacity in China     

3.1.1 PUDs capacity in China in 2021     

3.1.2 New and expansion projects in China     

3.2 PUDs output in China

3.3Major PUDs manufacturers in China  

3.3.1 Wanhua Chemical  

3.3.2 Covestro

3.3.3 Zhejiang Huafon Synthetic Resins  

3.3.4 Scisky    

3.3.5 SiwoChem      

3.4 Landscape of market competition      

4. Downstream markets

4.1 Actual consumption of PUDs in China in 2021  

4.2PUDs consumption by synthetic leather     

4.3PUDs consumption by genuine leather

4.4PUDs consumption by coatings  

4.5PUDs consumption by adhesives

4.6PUDs consumption by gloves     

4.7 PUDs consumption by other downstream sectors

5. Market outlook for 2022-2026  

5.1 Trend in PUDs industry and research hotspots

5.2 Forecast of PUDs demand in China 2022-2026  

5.2.1Demand from leather industry 

5.2.2Demand from coatings industry       

5.2.3Demand from adhesives industry     

5.2.4Demand from gloves industry 

5.2.5Demand from other industries 

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