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Methylene Diphenyl Di-isocyanate (MDI) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

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  • 215 Pages
  • August 2022
  • Region: Global
  • Mordor Intelligence
  • ID: 4520097
The methylene diphenyl di-isocyanate (MDI) market accounted for 6,919.13 kilo metric ton in 2021, and it is expected to register a CAGR of 5.17% during the forecast period (2022-2027).

The market witnessed growth in 2021 after recovering from the COVID-19 pandemic in 2020. Considering the post-COVID-19 lockdown scenario in 2021, the consumption of MDI has increased in various end-user industries, such as construction, electronics and appliances, automotive, and others. The construction industry is the prime application sector for methylene diphenyl di-isocyanate (MDI) across the world. In these end-user industries, MDI is used in various applications, including PU foam, coatings, adhesives, elastomers, and binders.

Key Highlights

  • Over the short term, the growing demand for PU in insulation in the construction industry and the expanding scope of application in various end-user industries are expected to drive the market's growth.
  • On the flip side, stringent regulations associated with MDI and the toxic effects of MDI may act as barriers to the growth of the market studied.
  • The phosgene-free MDI production process is expected to offer lucrative opportunities for the growth of the market.
  • Asia-Pacific dominated the market across the world, with the largest consumption from countries like China, Japan, and South Korea, and it is likely to witness the highest CAGR during the forecast period.

Key Market Trends

The Construction Segment is Expected to Dominate the Market

  • Construction is the largest end-user industry for the MDI market, where it is used in various household, commercial, and industrial applications.
    • One of the largest applications is the usage of rigid PU foam as wall and roof insulation, insulated panels, and gap fillers for the space around doors and windows. Polyiso laminate board stock, used primarily in roofing and wall insulation, accounts for the majority share of total rigid PU foam in construction applications. Some rigid PU foams can be applied to seal gaps and to cover irregular shapes. Such foams include spray, pour-in-place, and one-component foams. The environmental benefits of rigid PU foam are significant and include increased energy efficiency and reduced project weight. Given the widespread use of rigid PU foam in construction, these savings are multiplying at an increasing rate worldwide.
    • Protective coatings are one of the most popular applications of PUs in building and construction. They are used in the production of wood floors, basements, buildings, bridges, and many other commercial and consumer products.
    • PU adhesives represent another large market for PU materials in this end-user industry. Owing to their fast cure time, bond strength, and weather resistance, PU adhesives are used in roofing, flooring, wallboard, and window/door installations. PU sealants, including sealants for expansion joints, basement and driveway sealants, and energy-efficient windows, also come under notable applications.
    • PU elastomers are employed in the construction of running tracks and thermal breaks in metal frame windows.
    • PU binders are used to bind reconstituted wood products into oriented strand board (OSB) products, which are used as structural panels for construction.
    • High insulation demand for high energy levels is currently driving the demand for polyurethanes. Insulation made of polyurethane is one of the most effective ways to achieve great energy efficiency and zero emissions.
  • The global construction industry was valued at about USD 12 trillion in 2019, registering a growth rate of about 4% compared to the previous year. The value of the global construction industry had declined in 2020 as construction activities were temporarily paused during the government-imposed lockdown to curb the spread of new COVID-19 cases. However, in 2021, the global construction industry picked up the pace, and it is expected to continue the same momentum in the coming years.
  • For instance, according to the National Bureau of Statistics of China, China's construction industry has been continuously expanding, with total output accounting for about CNY 25.9 trillion in 2021. The construction industry in China recorded more than CNY 29 trillion in output that year due to growing urbanization.
  • Moreover, in the United States, according to the United States Census Bureau, the total new construction put in place was valued at about USD 1,469 billion in 2020, registering a growth rate of 4.9% compared to the USD 1,391 billion in 2019. Moreover, in 2021, according to the US Census Bureau, construction spending amounted to USD 1,590 billion, witnessing a growth rate of 8.2% compared to 2020, thereby increasing the consumption of MDI from various construction applications.
  • Therefore, all the aforementioned factors from the construction industry are likely to significantly impact the demand in the studied market in the years to come.

The Asia-Pacific Region is Expected to Dominate the Market

  • The Asia-Pacific region dominated the global market share. With the increasing demand from industries such as construction, furniture, electronic appliances, and automotive in countries like China, India, and Japan, the usage of MDI is increasing in the region. In Asia-Pacific, China provides the major market for MDI. MDI is primarily used for polyurethane in China, and the country is the world's largest producer and consumer of polyurethane products.
  • China is the largest manufacturer of automobiles in the world. The country’s automotive sector has been shaping up for product evolution, focusing on manufacturing products to ensure fuel economy while minimizing emissions, owing to the growing environmental concerns.
  • The automotive production in the country increased from 25.225 million vehicles in 2020 to 26.08 million vehicles in 2021. Moreover, the production increased by 1% compared to 25.75 million vehicles produced in 2019. The increase in automotive production compared to pre-COVID-19 levels has been supporting the growth of the MDI market.
  • China is the largest manufacturer and consumer of electric vehicles. In 2019, there were 1.2 million new electric vehicle registrations, up by 3% compared to 2018. However, it was very low compared to the growth rate of more than 75% for the past four years. About 2,000 fuel cell electric vehicles (FCEVs) will be on the road by the end of 2019.
  • According to the National Development and Reform Commission of China, the Chinese government approved 26 infrastructure projects at an estimated investment of about USD 142 billion in 2019, which are expected to be completed by 2023. The growing infrastructure investment and building of complex structures are expected to drive the market. Also, the country has the largest building market in the world, making up 20% of all construction investments globally. The country alone is expected to spend nearly USD 13 trillion on buildings by 2030.
  • According to the National Bureau of Statistics of China, the construction industry value added in 2020 was around CNY 7,244.47 billion. Eight cities and provinces announced their investment budgets worth USD 4.8 trillion. Another eight provinces said they would invest up to CNY 2.79 trillion in total.
  • According to China’s five-year plan unveiled in January 2022, the construction industry in the country is estimated to register a growth rate of 6% in 2022.
  • China is the largest base for electronics production in the world. Electronic products, such as smartphones, TVs, wires, cables, portable computing devices, gaming systems, and other personal electronic devices, recorded the highest growth in the electronics segment. The country serves the domestic demand for electronics and exports electronic outputs to other countries. The growing demand for electronic products in the country is estimated to drive the demand in the market during the forecast period.
  • Furthermore, in India, the government has been formulating initiatives to attract FDI in the manufacturing sector, primarily to establish the country as a manufacturing hub. The government is focusing on increasing the share of the manufacturing sector to GDP, from 16% to 25%, by 2022.
  • According to OICA, the country produced 3.39 million vehicles in 2020, which severely declined by 25% compared to 2019. The country produced 4.399 million vehicles in 2021, which increased by 30% compared to 3.38 million vehicles in 2020 and was still 3% lower compared to the 4.52 million vehicles produced in 2019.
  • India is home to over 2,500 decorative coatings and 800 industrial coatings manufacturers. The demand for paints and coatings in the Indian market is expected to register a CAGR of around 8% during the forecast period. This increasing demand for paints and coatings has been prompting companies to increase their production capacities in the country. This is further expected to increase the demand for methylene diphenyl di-isocyanate (MDI) in the country.
  • The Indian electronics market is expected to reach USD 400 billion by 2025. Additionally, India is expected to become the fifth-largest consumer of the electronics and appliances industry in the world by 2025. In India, technology transitions, such as the rollout of 4G/LTE networks and IoT (Internet of Things), are driving the adoption of electronic products. Initiatives such as ‘Digital India’ and ‘Smart City’ projects have raised the demand for IoT in the country.
  • Therefore, all the above-mentioned factors are likely to significantly impact the demand in the market in the Asia-Pacific region in the years to come.

Competitive Landscape

The methylene diphenyl di-isocyanate (MDI) market is consolidated in nature, with the top five players contributing to more than 80% of the market share in 2021. Some of the key players in the market include Wanhua, BASF SE, Covestro AG, Dow, and Huntsman International LLC.

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Table of Contents

1.1 Study Assumptions
1.2 Scope of the Study
4.1 Drivers
4.1.1 Growing Demand for PU in Insulation in the Construction Industry
4.1.2 Expanding Scope of Application
4.2 Restraints
4.2.1 Stringent Regulations Associated with MDI
4.2.2 Toxic Effects of MDI
4.3 Industry Value Chain Analysis
4.4 Porter's Five Forces Analysis
4.4.1 Bargaining Power of Suppliers
4.4.2 Bargaining Power of Consumers
4.4.3 Threat of New Entrants
4.4.4 Threat of Substitute Products and Services
4.4.5 Degree of Competition
4.5 Production Process Analysis
4.6 Technology Licensing and Patent Analysis
4.7 Price Trend Scenario
4.8 Regulatory Policy Analysis
5.1 Application
5.1.1 Rigid Foam
5.1.2 Flexible Foam
5.1.3 Coatings
5.1.4 Elastomers
5.1.5 Adhesive and Sealants
5.1.6 Other Applications
5.2 End-user Industry
5.2.1 Construction
5.2.2 Furniture and Interiors
5.2.3 Electronics and Appliances
5.2.4 Automotive
5.2.5 Footwear
5.2.6 Other End-user Industries
5.3 Geography
5.3.1 Asia-Pacific China India Japan South Korea Rest of Asia-Pacific
5.3.2 North America United States Canada Mexico
5.3.3 Europe Germany United Kingdom France Italy Russia Rest of Europe
5.3.4 South America Brazil Argentina Rest of South America
5.3.5 Middle-East and Africa Saudi Arabia South Africa Rest of Middle-East and Africa
6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
6.2 Market Share Analysis
6.3 Strategies Adopted by Leading Players
6.4 Company Profiles
6.4.1 BASF SE
6.4.2 Covestro AG
6.4.3 Dow
6.4.4 Hexion
6.4.5 Huntsman Corporation
6.4.6 Kumho Mitsui Chemicals Corp?.
6.4.7 Sadara?
6.4.8 Shanghai Lianheng Isocyanate Co. Ltd
6.4.9 Sumitomo Chemical Co. Ltd ?
6.4.10 Tosoh Corporation?
6.4.11 Wanhua?
6.4.12 Chongqing ChangFeng Chemical Co. Ltd?
6.4.13 KAROON Petrochemical Company
7.1 Phosgene-free MDI Production Process

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Covestro AG
  • Dow
  • Hexion
  • Huntsman Corporation
  • Kumho Mitsui Chemicals Corp​.
  • Sadara​
  • Shanghai Lianheng Isocyanate Co. Ltd
  • Sumitomo Chemical Co. Ltd ​
  • Tosoh Corporation​
  • Wanhua​
  • Chongqing ChangFeng Chemical Co. Ltd​
  • KAROON Petrochemical Company