ACC Studies North American Polyurethane Market
October 19, 2009
NATIONAL HARBOR, MD – Despite a challenging economy and declining production, the polyurethane industry continued to evolve over the past two years while addressing growing concerns over energy conservation, that according to the 2008 End-Use Market Survey on the Polyurethanes Industry in the United States, Canada and Mexico. Research conducted by IAL Consultants on behalf of the Center for the Polyurethanes Industry (CPI) of the American Chemistry Council (ACC), shows that overall production of polyurethane in NAFTA declined by 6.7 percent per year during the past two years. The figure reflects a 7.7 percent annual decline in U.S. markets and 10.8 percent decline in Canada, while Mexico has shown positive growth for the third consecutive survey. The production of polyurethane in Mexico increased at an average annual rate of 9.6 percent over the past two years, partly due to increased domestic demand.
“Overall, our research shows that the industry continues to change,” said IAL Associate Director Angela Austin. “While some markets are mature, new ones have opened up. Renewable chemicals and energy efficiency continue to be important topics. Change is essential for evolution, and it would be worrying if there were no signs of market evolution.”
Signs of growth in the polyurethane industry included continued increases in spray polyurethane foam demand for residential and industrial applications, as well as use of the material by the U.S. Army to insulate tents and other structures at bases in the Middle East. Polyurethane also is being used for effective wound dressings, pharmaceutical delivery media, reliable drug delivery, comfortable mobility aids and hygienic hospital environments. The demand for low-VOC and high-performance coatings related to product substitutions made the decline in the production of coatings, adhesives, sealants and TPU less severe.
Though there was a sharp decrease in binder production as a result of the decline in OSB (oriented strand board) demand by the U.S. housing sector, the desire for safe and clean recreational areas has helped increase use of polyurethane binders in sports tracks and playgrounds in the past two years. New applications to improve quality of life are contributing to market evolution as well, such as new comfort levels in golf cart seating for the growing number of elderly.
Manufacturers looking to comply with new regulations and secure certification are also finding ways to create opportunities for growth. The survey shows a boost to the rigid polyurethane foam market for thicker panels needed to meet new ASHRAE (American Society of Heating, Refrigerating and Air-Conditioning Engineers) standards. CARB (California Air Resources Board) regulation and the CertiPUR program also helped to secure business in the bedding industry for flexible polyurethane foam.
The United States, representing 81 percent of the total polyurethane production in NAFTA, had a market breakdown similar to NAFTA overall. Imports of upholstered furniture continued to increase in the United States. Though statistics from the U.S. Department of Trade and Commerce did indicate a slight drop in overall imports during the past two years, these were a reflection of the current state of the housing market and declining consumer demand.
In Mexico, production of rigid polyurethane foam dominated the market as new companies invested in the country and the appliance industry continued to grow. In 2008, the Mexican appliance industry produced 9 million refrigerators and freezers compared to 11.3 million in the United States.
Mexican furniture and automotive markets also grew during 2008, driven by export and domestic demand. With 2.1 million units in 2008, automotive production exceeded Canada’s. Flexible molded-foam end-use production increased due to the manufacture of automotive components and flexible slab-stock production increased as well. Though families currently prefer to buy new upholstered furniture over new mattresses, the bedding market has potential for further development. Despite a deficit of five million homes in Mexico, home ownership has increased.
Canada, the third market in the NAFTA region, accounted for 8.9 percent of total production. Flexible foam slabstock accounted for 16 percent of total production, compared to 21 percent in 2006, and the fall in U.S. housing starts led to 54 percent of OSB production being idled.
Conducted every two years, the CPI End-Use Market Survey addresses the North American polyurethanes industry. It is available for purchase at www.americanchemistry.com/polyurethane. New for this year, CPI is also offering an interactive downloadable database where users can access survey data.