Polyurethane rigid foams: manufacture, applications, markets, and trends
About 50% of all polyurethane foam production is consumed by market demand for rigid polyurethane foam . In contrast to flexible foams that are primarily an agent for comfort and cushioning, rigid foams are sought for their use in insulation and energy efficiency. To fulfill that mission, polyurethane rigid foam formulation, physics and methods, are very different from those for flexible foams, even while the fundamental aspects of chemistry, reaction kinetics, structure development, and morphology are the same. Polyurethane rigid foam is a premier material for delivery of insulation efficiency as illustrated by Figure 8.1 . In contrast to other conventional materials, polyurethane provides the most insulation for unit thickness. As a two-component application, it provides flexibility to where and when the building blocks are transformed from liquid to solid foam form. Due to the large number of building blocks and the commodity nature of the feedstocks to make them, rigid foams can be produced at relatively low cost and able to provide a significant amount of differentiation to suit specific application requirements.
REGIONAL MARKET DYNAMICS
The estimated production of rigid polyurethane foams in 2012 is shown in Figure 8.2. Rigid foams primarily comprise (i) those produced for building insulation, primarily produced geographically close to where they are used, (ii) foams used for appliances that will represent the summation of regional consumption and those made for export. Many of the emerging economies are developing strong demand for
FIGURE 8.1 Relative performances of common insulation materials and construction materials. It takes more than 2 in. of cork and 15 in. of concrete to provide the insulation of 1 in. of PU rigid foam.
FIGURE 8.2 Proportional production of rigid foams in 2012 segmented by geographical region.
appliances such as refrigerators, but certainly much of the production in the Asia-Pacific region is for export to other geographies.
In mature economies such as those of North America and Europe, the production of rigid foam for construction is about double that produced for appliance applications. In the emerging export economies, the volume ratio of construction to appliance foams is close to 1, representing the overproduction of foams for appliances that subsequently get exported.
While useful, the data in Figure 8.2 is a vast simplification of a remarkably complex geographical puzzle. For instance, in the Asia-Pacific region, the polyurethane rigid foam market for appliances has many hundreds of foamers, but the top ten represent about 50% of the total volume. In that market, the local Wanhua Group dominates the local trade for building blocks to make rigid foams. Asian polyurethane producers monopolize about 50% of the total Asia-Pacific market for chemicals. All the large multinational companies have a footprint in the Asia-Pacific region with varying degrees of market penetration. As with many industries of which polyurethanes is an example, the power of a historical business relationship between two companies (i.e., supplier and customer) is as important in many ways as price, and it is known that certain suppliers have entrenched relationships with customers that are resistant to simple price inducement to switch.
For illustrative purposes, another fascinating dynamic of the Asia-Pacific market are the consequences of the phenomenal growth of these emerging and established economies . In anticipation of the large Chinese population's demands for the conveniences and standards of modern life, there has been rapid expansion of industrial production. As Figure 8.3 shows, the supply/demand ratio for polyurethane chemicals has grown to an extent that industrial asset utilization is projected to be below 70% for many years—a value considered to be extremely low. It remains to be seen if such low return on investment can be tolerated by the industrial concerns, or if asset utilization will in fact accelerate and thereby help maintain a healthy and growing industry. In any case, it assures that basic costs for polyurethane chemicals in the Asia-Pacific
FIGURE 8.3 Ratio of production and consumption volume in the Asia-Pacific region showing the extent of regional investment in the polyurethane industrial base. ♦ Indicates a projected value.
FIGURE 8.4 Approximate European (a) construction and (b) appliance market sizes for 2012. Total volume of construction market is approximately 1 billion pounds and about 500 million pounds for the appliance market.
markets will remain low, and will contribute to low price inflation from finished products using polyurethane products exported from these economies.
A more complex market situation is presented by Europe, Middle-East, and Africa. Beyond geographical proximity, this category is somewhat arbitrary with the Middle-East and Africa representing between 5 and 10% of the total addressable market for rigid polyurethane foams for this grouping [1,4]. Within Europe, there is a bifurcation in market activity between Eastern and Western European markets (Fig. 8.4).
For rigid foam targeted toward the construction market, Western Europe represents about 75% of the total volume. This reflects greater emphasis on energy efficiency in the Western European construction market, and willingness of consumers to pay for benefits accrued to resource conservation. By contrast, the market for polyurethane foams directed at appliances is dominated by Eastern Europe with about 65% of the total addressable market. To some extent, this reflects the faster growth of consumer culture purchasing appliances, but also reflects the lower labor-cost environment of Eastern Europe attracting manufacturing assets for export to other geographies.
Like most Western economies, there is a high level of competition among multinational chemical producers. Unquestionably, the large German concerns, Bayer and BASF, dominate the European commercial landscape serving about 40% of the construction market and nearly 60% of the appliance market. To be sure, other companies including Dow and Huntsman compete with Bayer and BASF in the European polyurethane rigid foam markets. While the dominance of the German concerns may, to a small, extent reflect regional preference for a local producer, it also reflects the product mix Bayer and BASF offers that most closely suits the local requirements. Polyurethane chemical feedstock producers from China are also developing a commercial presence in Europe, the main effect being to maintain a low-price environment for all competitors for the foreseeable future due to oversupply in Asia.
The North American market for rigid foams (including the United States, Canada, and Mexico) in 2012 totaled about 2.5 billion pounds. This volume is dominated by the US market (Fig. 8.5). The market dynamics are somewhat similar to those of Europe with the low labor cost Mexican economy producing a preponderance of appliance foams that then get exported throughout North America. Large multinational
FIGURE 8.5 Approximate breakdown of the North American rigid foam market size. Total volume is about 2.5 billion pounds.
FIGURE 8.6 Proportional consumption of polyurethane rigid foams in (a) the mature consumer economies of the United States and Canada (b) the consumer/export economy of Mexico. "Other" represents automotive, pipe, packaging, and other smaller applications.
concerns such as Whirlpool, Samsung, LG, and MABE (a company indigenous to Mexico), are significant customers for appliance foams targeted for local, but primarily, export markets. The breakdown for market participation is provided by Figure 8.6. Canada and the United States are combined since their percentage breakdown by application is insignificantly different. The similarity between the participation of Eastern Europe and Mexico in their respective regions is striking and reflects their common participation roles in these markets.