IAL Consultants is pleased to announce the recent publication of the 2022 edition of its report on the markets for Polyurethane Chemicals and Products in the Americas.

This new study updates and expands upon the information included in our previous study published in 2021. 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 2021 as the base year and market forecasts provided to 2026.

New: Further regional segmentation for flexible slabstock into furniture component foam, bedding foam, vehicle foam, recycled foam is provided.

Overview

-   Total production of polyurethane products in the Americas was approximately 5.15 million tonnes in 2021. This represents an increase of 5.7% compared to the production seen in 2020, which can be attributed to a recovery from the impacts of the coronavirus pandemic. Output had declined by 3.6% in 2020, meaning that the region had already surpassed in 2021 the production levels seen in 2019 pre-pandemic.

-   IAL is forecasting a growth rate of 4.1% for 2022, which is somewhat lower than 2021; this lower growth is being driven by ongoing economic uncertainties, not least rising inflation and falling consumer demand. By 2026, total production is forecast to reach around 6.19 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 2021, but North America fared considerably better than its South American counterpart. Growth was particularly strong in Mexico, but this came after a very difficult year in 2020.

-   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. Argentina was the best performer in 2021, with a rise in PU output of nearly 12%; however, the country is still making up for losses incurred in 2019 and 2020. The outlook for Argentina for 2022 is not promising, as the country is battling serious economic issues.

-   Brazil and Venezuela saw declines in their polyurethane production in 2021. Brazil’s 1.6% decline was somewhat surprising and was driven by a drop in the flexible foam category. Venezuela’s industry contraction was less surprising, as it has been on a declining trend for some years now. PU output tumbled a further 5.8% in 2021 due to the fragility of the country’s economy, and prospects for 2022 remain negative.

-   There was high single digit growth in Colombia and Mexico in 2021, and the US saw growth of 6.3% overall. Growth was spurred by many factors, not least COVID-19 stimulus measures, buoyant construction activity in North America, and strong consumer demand for items such as furniture, mattresses and domestic appliances. On the other hand, the automotive sector remained in a weakened state due to supply chain issues.

-   The raw material supply situation was very difficult through 2021 and into 2022. The supply chain difficulties caused by COVID-19 were exacerbated by freak weather conditions in the southern US in early 2021, which led to many raw material customers being put on allocation.

-   South America is particularly susceptible to raw material price increases and supply shortages because of the lack of domestic producers. Some polyurethane processors turned to raw material suppliers in Asia to try to meet their requirements.

-   Rigid foam remains the largest end-use market for polyurethane in the Americas region, with a share of 36%. It is followed by flexible foam at 30%, while production volumes for CASE products and binders are considerably lower. Apart from binders, rigid foam proved the most resilient to the effects of the pandemic scenario in 2020, with a decline in output of just 0.6% overall. It was propped up by the unexpectedly strong performance of the construction and appliance sectors. Growth was an impressive 8% in 2021, as the US construction sector was very buoyant.

-   Production of CASE products and binders also performed well in 2021, with growth between 5-6%. Many industries bounced back after a difficult year in 2020.

-   The worst performer in 2021 was flexible foam, with a growth rate of 2.9%. This sector was weighed down by a negative situation in Brazil and Venezuela, as well as ongoing raw material shortages.

-   By 2022, production levels for all categories are expected to return to those seen pre-pandemic. Within sectors, however, there will be differing stories. The automotive industry in particular is expected to take much longer to recover.

Flexible and Rigid Foams

-   Rigid and flexible foam are the biggest end-use sectors in the Americas, with a share of 36% and 30%, respectively.

-   The Americas region produced a total of 1.57 million tonnes of polyurethane flexible foam in 2021, encompassing both slabstock and moulded foam. Output increased by 2.9% compared to 2020, with the best performances seen in Colombia, Mexico and Peru. All countries had seen a decline in 2020 (with the exception of Argentina, whose output remained static), so much of the growth in 2021 was due to the catch-up effect.

-   Venezuela continued its declining trend in 2021, and Brazil also saw a downturn in flexible foam production.

-   For 2022, IAL is forecasting growth of 3.8% for flexible foam in the region as a whole, with a further decline in Venezuela and a small drop in Argentina. All in all, pre-pandemic output levels should be regained by the end of 2022. However, the fortunes are somewhat varied among the different product categories. It will be some years before the automotive seating foam segment, for example, reaches the levels of production seen before the pandemic.

-   The US is by far the largest producer, with a share of 60%, but there are also sizeable volumes manufactured in Brazil and Mexico. Most other countries are quite small in comparison. Slabstock accounts for 78% of production and moulded foam for the remainder.

-   The largest product categories are conventional polyether slabstock, with a 52% share of output, followed by viscoelastic foam at 18.5%. Most segments saw growth in the low to mid-single digits in 2021. There was only very small growth in conventional polyether slabstock production in 2021, but this was partly because the sector had managed to stay positive in 2020. On the other hand, the automotive categories had suffered heavy losses in 2020 and therefore bounced back more strongly in 2021.

-   The Americas region produced ~1.85 million tonnes of rigid polyurethane foam in 2021, an increase of 8% compared to the previous year. The US is the largest producer by some margin, followed by Mexico. All countries showed growth in 2021, with the exception of Venezuela. Argentina exhibited the highest growth, followed by Mexico and Chile.

-   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.

-  Appliance foam, SPF and OCF were the best performers in 2020, all achieving low positive growth rates despite the pandemic scenario. Water heathers was the fastest growing segment in 2021, followed by SPF, which continued to perform well due to the strong new build market in the US.

-   The rebound for the rigid foam industry was rapid, with production already exceeding pre-pandemic levels, as demand continued to be strong in construction and appliance applications.

-   Rigid polyurethane foam remains the largest end-use market segment in North America for polyurethanes, comprising 38% of total PU production in the region, driven by the ongoing strong demand from construction applications, and to a lesser extent, appliances.    

Coatings

-   The Americas region produced ~478,000 tonnes of polyurethane coatings in 2021, an increase of 6.4% over 2020. This followed a considerable decline of 8.4% in 2020 compared to 2019. The impacts of the COVID-19 pandemic were still being felt in industries such as automotive in 2021, which hindered recovery.

-   The largest end-use applications were industrial and maintenance coatings, in which polyurethane is a well-established technology. All applications exhibited growth in 2021, after declines across the board in 2020.

Adhesives and Sealants

-   The Americas region produced nearly 333,000 tonnes of PU adhesives and sealants in 2021, with most production taking place in North America (over 90% in the US alone). Production increased by 5% in 2021 after a decline of 3.3% in 2020. The sector has not fared as badly as some polyurethane segments during the pandemic, mostly thanks to the buoyancy of the construction applications.

-   IAL is forecasting growth of 4% for the region in 2022. Growth in the construction industry is expected to slow down this year.

-   The largest categories are construction adhesives, construction sealants and flexible packaging adhesives. All segments enjoyed growth in 2021, but the best performing sectors were flexible packaging adhesives and other transport sealants.

Elastomers

-   The Americas region produced ~450,000 tonnes of polyurethane elastomers in 2021, showcasing an increase of 6.3% compared to the previous year. The US is by far the largest producer, but there are sizeable outputs from Brazil and Mexico too.

-   The impact of the COVID-19 pandemic was felt across all countries and all sectors in 2020, but most enjoyed a rebound in 2021. Venezuela was the only country to see a further decline in output, but this has been the prevailing trend for some years now.

-   The largest product sector is cast elastomers, thanks to the breadth of applications served by these products, followed by TPU and footwear elastomers. All sectors had declined in 2020, with the exception of TPU, which stayed flat. In 2021, there was growth in production of all elastomer product types apart from technical microcellular, which suffered from the continuing problems in the automotive industry.

-   The fastest growth in 2021 was in footwear elastomers, followed by spandex and synthetic leather. However, this came off the back of a very poor performance in 2020, as the COVID-19 pandemic had a detrimental impact on the textile and apparel industries.

Binders

-   The Americas region produced over 477,000 tonnes of polyurethane binders in 2021, representing an increase of 6% compared to the previous year. Forest products binders make up the majority of production with a 75% share.

-   Most production of binders takes place in the US, 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.

-   Thanks to the relative buoyancy of the construction sector, and the established role of OSB in the North American construction sector, production remained stable in 2020, with a rise in the large forest products segment able to compensate for declines in foundry core binders and rubber crumb.

-   2021 was positive in all segments, with the fastest growth in foundry core binders as it made up for lost ground in 2020.

-   For 2022, IAL is forecasting overall growth of 3.4%, with the best performance again in foundry core binders.

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The data in this eight-volume report include raw material consumption by product type, by country and by major end-use industry.  The Raw Materials volume contains comprehensive supply and demand data for all of the major polyurethane raw material types. The Major End-Use Markets volume contains an overview of the major markets for PU products and a summary of trends and drivers.