Polyurethane Chemicals & Products in the Americas - 2023 Edition

Executive Summary

This study updates and expands upon the information included in our previous study published in 2022. The information contained within this report is based upon an extensive programme of interviews throughout the industry. The report contains both PU product production and raw material consumption figures, with 2022 as the base year and market forecasts provided for 2027.

The analyst is continuously striving to improve its products. In the 2023 report, there is further regional segmentation for rigid foam (when applicable), which is now split into: PUR and PIR.

Overview

• Total production of polyurethane products in the Americas was approximately 5.29 million tonnes in 2022. This represents an increase of 3.4% compared to the production seen in 2021, although growth decelerated from the previous period’s 5.6%. Output had declined by 3.9% in 2020, meaning that the region had already surpassed the production levels seen in pre-pandemic 2019 in 2021.
• The analyst is forecasting a growth rate of just 1.1% for 2023; the situation this year is being hindered by a downturn in construction activity in the US and Canada, and instability in some of the South American economies. By 2027, total production of polyurethane is forecast to reach around 6.15 million tonnes.
• North America accounts for the largest share of polyurethane production due to the strength of the US industry. South America accounts for just 15% of regional output, and indeed its PU sector is still at a relatively nascent stage in many applications. Output increased in all regions in 2022, with a comparable picture between North America and South America overall in terms of growth.
• The US is by far the largest polyurethane market in the Americas, with a 70% share of production, followed at some distance by Brazil and Mexico. Colombia was the best performer in 2022, with a promising growth rate of 7.8% thanks to the acceleration of its economy. Most other countries saw growth in the 3-4% range. The outlier at the bottom end was Chile, which saw its PU output increase by just 1.7%.
• There was a low-single-digit increase in PU production in Venezuela; however, this came several difficult years, and the volumes remain significantly below pre-crisis levels. The situation is still volatile in the country.
• The US, which is by far the largest polyurethane manufacturer in the region, saw growth of 3.2% overall. A rebound in the automotive sector was offset by a decline in the flexible slabstock market and a slowdown in construction activity towards the end of 2022. Growth is expected to decelerate further to just ~1% for 2023.
• The raw material supply situation eased through 2022, with most producers reporting no delays or shortages. South America imports most of its PU raw materials, so the currency crisis in some countries continued to cause problems.
• Rigid foam remains the largest end-use market for polyurethane in the Americas region, with a share of 37% (up from 36% in 2021 thanks to faster growth). It is followed by flexible foam at 29%, while production volumes for CASE products and binders are considerably lower. Rigid foam also represented the fastest growing category in 2022, soaring 7.3% compared to 2021 volumes; categories such as flexible-faced panels and spray foam did particularly well.
• PU elastomers also did well in 2022, with a growth in production of 5.8%; they are used in a wide variety of applications and hence are protected somewhat if there are downturns in certain downstream industries.
• Production of adhesives/sealants and coatings grew moderately in 2022, at 3.6% and 2.8%, respectively. This was helped by the uptick in automotive production and came despite the slowdown in construction activity. These products also find usage in a wide range of applications.
• The worst performer in 2022 was flexible foam, with a decline of 0.7% compared to 2021. This sector was weighed down by a considerable downturn in flexible slabstock production, which was offset to a great extent by the resurgence of automotive activity, helped by the EV trend.
• Production of PU binders was quite static in 2022.
• By 2023, production levels for all categories are expected to return to those seen pre-pandemic, with the exception of flexible foam.
• Renewable raw materials have been in the market for some time but have not yet taken any notable market share from conventional materials; they can be difficult to work with due to inconsistencies in product and quality. However, the continued focus of all the major raw material companies on sustainability and their carbon footprints will likely drive further development and uptake. The application of bio-based feedstocks is a relatively simple way to achieve greater sustainability, as there is no requirement for product re-registration.

Flexible and Rigid Foams

• Rigid and flexible foam are the biggest end-use sectors in the Americas, with a share of 37% and 29%, respectively.
• The Americas region produced a total of 1.56 million tonnes of polyurethane flexible foam in 2022, encompassing both slabstock and moulded foam. Output decreased by 0.7% compared to 2021, with declines in Argentina, Canada and the US. The highest growth rates were in Colombia and Mexico.
• Venezuela saw some growth in 2022 for the first time in many years, buoyed by a small economic recovery in the country.
• For 2023, the analyst is forecasting growth of 1.5% for the region as a whole, with low growth in most countries amid a muted economic environment. Chile is likely to see a small decline as it battles stagnant economic growth and the troublesome constitutional reform process.
• All in all, pre-pandemic output levels should be regained by the end of 2024. Both slabstock and moulded volumes remain below the 2019 numbers; the automotive categories struggled in 2020 and 2021, and the furniture/bedding applications had a difficult year in 2022.
• The US is by far the largest producer, with a share of nearly 60%, but there are also sizeable volumes manufactured in Brazil and Mexico. Most other countries are quite small in comparison. Slabstock accounts for 76% of production and moulded foam for the remainder.
• The largest product categories are conventional polyether slabstock, with a 50% share of output, followed by viscoelastic foam at 18%. There were wide variations in growth among the categories in 2022. Output of conventional polyether slabstock and viscoelastic foam declined, by 3.8% and 3.7%, respectively. On the other hand, the automotive categories did well in 2022, with the best growth in carpet backing/NVH foam (+13.5%), integral skin foam (+9.6%) and commercial seating foam (+9.5%). Production of car seating foam was also up 7.4%.
• Furniture component foam (moulded) also fared well in 2022, with output rising 8.6% to 31,000 tonnes.
• The Americas region produced ~1.95 million tonnes of rigid polyurethane foam in 2022, an increase of 7.3% compared to the previous year. The US is the largest producer by some margin (with a 74% share of output), followed by Mexico and Canada. Production in the countries of South America is typically much smaller. All countries showed growth in 2022, with the exception of Brazil; the latter was weighed down by a decrease in the production of rigid foam for domestic refrigeration appliances. Argentina exhibited the highest growth at +8.7%, followed by the US (+8.5%) and Colombia (+7.7%).
• The largest product category is flexible-faced panels, due to the prevalence of this building material in the US, followed by SPF, which also holds an eminent position in the North American construction industry. Refrigeration is also an important category, in which Mexico is dominant thanks to its large refrigerator and freezer industry.
• Flexible-faced panels represented the fastest growing product segment in 2022 (up over 12%), although some demand was accounted for by inventory build in the US following previous shortages. There was also close to double-digit growth in spray foam and pipe-in-pipe insulation.
• The domestic refrigeration category was static overall in 2022, and there was a decline in the water heater segment. Many discretionary purchases of these items had been pulled forward by the pandemic, and it took a while for the normal replacement pattern to resume.
• The rebound for the rigid foam industry from the effects of the pandemic has been rapid, with production already exceeding pre-pandemic levels by 2021, boosted by soaring construction activity and strong demand for appliances.
• The analyst is forecasting growth of just 2.4% for the rigid foam sector in 2023, which will be held back by the construction downturn in the US and muted growth in most of South America.

Coatings

• The Americas region produced ~491,000 tonnes of polyurethane coatings in 2022, an increase of 2.8% over 2021. The growth rate halved compared to the prior year due to a deceleration in most segments; however, the auto OEM coatings segment saw exponential growth.
• The largest end-use applications were industrial and maintenance coatings, in which polyurethane is a well-established technology and the uses are highly varied; wood and furniture coatings also account for a good portion of production. All applications exhibited growth in 2022, but the best performances were in auto OEM coatings and commercial vehicle coatings. The construction coatings segments saw lower growth.

Adhesives and Sealants

• The Americas region produced nearly 345,000 tonnes of PU adhesives and sealants in 2022, with most production taking place in North America (over 90% in the US alone). Production increased by 3.6% compared to 2021, buoyed by the uptick in automotive output and continued growth of flexible packaging.
• The analyst is forecasting growth of just 0.4% for the region in 2023. Construction activity nosedived in Q4 2022, and this continued into 2023. For example, in the US, single family housing starts were down nearly 30% in Q1 2023 compared to Q1 2022 amid elevated inflation rates and high material costs.
• The largest categories are construction adhesives, construction sealants and flexible packaging adhesives. All segments enjoyed growth in 2021, but the best performing sectors were automotive adhesives and sealants.

Elastomers

• The Americas region produced ~467,000 tonnes of polyurethane elastomers in 2022, showcasing an increase of 5.8% compared to the previous year. The US is by far the largest producer, but there are sizeable outputs from Brazil and Mexico too.
• Argentina and Colombia enjoyed high growth rates in 2022 thanks to the rebound of their footwear sectors, and Brazil’s production of spandex nearly doubled thanks to new capacity coming on stream.
• The largest product sector is cast elastomers with a 38% share, thanks to the breadth of applications served by these products, followed by TPU and footwear elastomers. All sectors saw growth in 2022, notably spandex as previously mentioned.
• Outside of spandex, the fastest growth in output was in technical microcellular elastomers (+9.0%), thanks to the rebound in the automotive industry. However, volumes remain below pre-crisis levels.
• There was an 8.3% growth in footwear elastomer production compared to the prior year, as the footwear industry saw a large increase in volumes. Synthetic leather elastomer producers benefitted from the acceleration in both automotive and footwear production.
• Contrary to previous years, TPU growth was very muted at just 0.4%. Rising prices caused a swing away from TPU in some applications.

Binders

• The Americas region produced over 476,000 tonnes of polyurethane binders in 2022, very similar to the previous year. Forest products binders make up the majority of production with a 74% share and thus the performance of this category has a large impact on the overall numbers.
• Most production of binders takes place in the US (with an 85% share), due to the large scale of its wood-based panels industry, with small quantities in Canada and Mexico and even smaller amounts in Brazil and Chile. Production of wood panels tends to take place in countries with good timber resources.
• US OSB production totaled 15.4 billion square feet in 2022, down 1.8% from 2021. Canadian OSB output increased by 0.4% in 2022. This meant that overall, there was a small drop in the production of binders for forest products in 2022.
• 2022 was positive in foundry core binders, as the automotive industry continued to make up for the losses it suffered in 2020 and 2021. Production of rubber crumb binders and other binders saw a very low growth trend.
• For 2023, the analyst is forecasting a decline of 4.1%, mainly due to an expected sizeable decline in the production of forest products binders amid construction industry woes in the US and Canada.

Methodology

Information provided in these reports are based on existing in-house data and an extensive programme of interviews with leading product manufacturers, trade associations, distributors and raw materials producers involved with the specific market researched. These interviews are conducted within the 3-6 months leading up to the publication of the study, with the duration of the research programme and the number of interviews completed depending on the scope of the study. The analyst publishes both regional and global reports, and in most cases, the interviews are conducted in the native language of the individual respondents.

In addition, published data and statistics are also reviewed in order to produce as accurate figures as possible for size of markets studied. Market forecasts are based upon industry and economic forecasts as well as upon other relevant commercial and technical issues likely to affect individual market sectors and products, as well as the interviews conducted for the study.