Polyether Polyol Market Overview
The global market for Polyether Polyols reached a valuation of USD 17.6 billion in 2023, and with projected to surpass USD 29 billion by 2032, exhibiting a projected CAGR of 4.9% from 2023 to 2032. Polyether polyols are used in the production of various products, including Polyurethane Foam (both Flexible and Rigid), and non-foam applications (Adhesives & Sealants, Elastomers, and Surface Coatings).
The demand for polyether polyols is linked to the performance of the polyurethane foam sector, encompassing both flexible and rigid foams. The global Polyether Polyols market experienced a de-growth in demand due to the adverse effects of the COVID-19 pandemic. Nevertheless, the long-term industry outlook remains optimistic. Anticipated growth in polyurethane foams, particularly in emerging regions, is further estimated to drive the polyether polyol market forward in the post-pandemic era, fostering a recovery within the industry.
Introduction to Polyether Polyol
Polyether polyol is a chemical compound mainly used in the production of Polyurethanes. Polyether polyols are made by the polycondensation reaction of organic oxide (ethylene oxide, propylene oxide, butylene oxide, epichlorohydrin) and glycol (ethylene glycol, propylene glycol, water, glycerine, sucrose). The polyether polyol market is segmented by applications and end-user industry. By applications, the market is segmented into polyurethane foams, adhesives & sealants, elastomers, surface coatings, and others. By end-user industry, the market is segmented into automotive, construction, furniture, refrigeration, industrial, and other end-use industries.
Polyether polyols are used to manufacture polyurethane foams (flexible and rigid) which are used in the automotive and construction industry. Polyether polyols exhibit a low glass transition temperature (Tg), that enables them to retain their physical properties and resist impact even when exposed to cold temperatures.
Global Polyether Polyol Demand Supply Analysis, 2016-2032 (KT)
Source: Secondary & Primary Research and Prismane Consulting estimates
Polyether Polyol Supply
The global Polyether polyol capacity has been estimated to be around 14,500 kilotons in 2023. The global operating rate has been between 65-75% in the last five years and is expected to remain in the same range in the forecast period. Asia Pacific region accounts for over 60% of the total Polyether polyol capacity followed by Western Europe and North America accounting for 18% and 15% respectively.
In the mid-term forecast period, Asia Pacific is estimated to add almost 1100 kilotons of new polyether polyol capacity to cater to the growing demand for polyether polyol from automotive, furniture, and construction end-use industries. Dow Chemicals, BASF, Covestro, Shell Chemicals, Zibo Dexin Liangbang Chemical, and Wanhua are some of the leading Polyether polyol producers in the world.
Global Polyether Polyol Demand, By Region - 2023 (KT)
Source: Secondary & Primary Research and Prismane Consulting estimates
Polyether Polyol Demand
From 2016 to 2023, global polyether polyol demand increased by an average of 1.5% per annum. Demand fell in 2020 as major end markets (furniture, automotive industry) suffered during the COVID-19 pandemic, with lockdowns and restrictions imposed in many countries to curb the spread of the virus. Currently, the majority of Polyether polyol demand is located in North America, Europe, and Northeast Asia, with the latter growing at a higher rate.
Asia Pacific dominates the Polyether polyols market accounting for around 55% on the back of strong demand from the automotive and construction industry in the region. Western Europe and North America together account for around 35% of the global polyether polyol demand. All other regions accounted for the remaining share of the total Polyether polyols demand.
Global Polyether Polyol Demand, By Application - 2016-2032 (KT)
Source: Secondary & Primary Research and Prismane Consulting estimates
Polyether Polyol Market Dynamics
Increasing demand for Polyurethane in Automotive and Construction industries
The automotive and construction end-use industries are the major market for polyurethane foam. Polyurethane foams are used as insulation in walls, roofs, and floors, as sealants and foams around windows and doors, medium-density fibreboard sheets, oriented strand board sheets, and as waterproof protective coatings. The rigid foams made of polyether polyols are used in construction methods to increase the amount of living space (because of the thinness), reduce CO2 emissions, and temperature control, and help in reducing energy and costs.
Flexible polyurethane foam is used as seat cushions in the automotive industry. These foams are available in a variety of shapes to meet the demands of the seating. China is the leading automotive manufacturer and the Chinese government and the Chinese government have set ambitious expectations for automobile production to cross 35 million units by 2025.
The rising demand for polyurethane foams from the automotive and construction industries is driving the Polyether polyols market.
Hazardous nature of polyols
Stringent rules and regulations related to the environment imposed by Registration, Evaluation, Authorization, and Restriction Chemicals (REACH) restrict the Polyether polyols market growth. The hazardous air pollutants emitted by the industries manufacturing polyether polyols include ethylene oxide, propylene oxide, hexane, toluene, and other pollutants are considered to be hazardous to human health when inhaled, and all can cause toxic effects. Exposure to harmful emissions is very hazardous for humans and could cause lung, throat, nose, eye, and skin irritation therefore protective measures have been taken by manufacturers which increases the cost and hinders the polyether polyols market.
Fluctuating raw material prices
Raw materials such as ethylene oxide, adipic acid, propylene oxide, and carboxylic acid are used for the manufacture of polyether polyols. These raw materials are derivatives based on petroleum and are prone to price fluctuations. Any variation in the cost of these essential raw materials directly affects Polyether polyol products in the supply chain. Fluctuations in crude oil pricing have led to limitations in the availability of ethylene oxide and propylene oxide. Thus, the price volatility of raw materials is the major challenge of the polyether polyols market. Increased Polyether polyols demand and instability in the prices of oil over the last few years have hindered the polyether polyols market growth.
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