Polyols Market Size, Share, Industry, Forecast and Outlook (2024-2031)

Polyols market is Segmented By Type (Polyether Polyols), By Application (Flexible Polyurethane Foam, Rigid Polyurethane Foam, CASE), By End-User (Packaging, Furniture, Automotive & Transportation, Building & Construction, Footwear, Electronics, the Others), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2024-2031 

Polyols Market Report Overview

The polyols market report provides an analysis of the market size, current trends, competitive landscape, and future market outlook. The demand for polyols is increasing due to its wide application in various industries such as food and beverage, pharmaceuticals, and personal care products. The market is highly competitive, with players like BASF SE, DowDuPont Inc., and others operating in the industry.

Polyols Market Scope and Summary

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Polyols are organic compounds containing multiple hydroxyl groups. Depending upon the number of hydroxyl groups, the polyols are called diols, triols, and tetrals. Polyether and polyester are the two main types of polyols. The physical state of polyols ranges from highly viscous liquids to solids at room temperature, depending upon the structure of the polyol molecules. The main application of polyols is in the production of polyurethane foam. Flexible, semi-rigid and rigid foams can be produced depending on the type and nature of polyols used. 

Polyols Market Dynamics and Trends

The polyols demand is mainly driven by the increasing demand for polyurethane foam from various end-user industries. The stringent environmental regulations on polyurethane foam production are a key factor in limiting the growth of this market. 

Increasing demand for polyurethane foam from various end-user industries. 

Due to its versatility and desirable mechanical and chemical properties, polyurethane foam is widely used across various industries. The automotive industry is one of the significant utilizers of polyurethane foam, mainly in various interior subsystems such as dashboards, car seats, rigid foam insulation panels, B-pillars, headliners, and bumpers. Rapid economic growth across the developing world, rising incomes among consumers, and the availability of easy financing options are key factors in driving the growth of the global automotive industry. 

The construction industry is another major utilizer of polyurethane foam. It is mainly used in the form of rigid or semi-rigid insulation panels. Rapid economic growth, urbanization, and government stimulus are fuelling a global construction boom in developing countries. The boom is more pronounced in countries of the Asia-Pacific such as China, India, Malaysia, Indonesia, and Thailand. Furthermore, government-driven public infrastructure projects such as railroads, bridges, expressways, and metros create demand for polyurethane insulation foam. 

Furniture and footwear are other major industries that are major users of polyurethane foam. The foam is used as padding in armrests and backrests for sofas and mattresses and as integrated cushioning. Flexible polyurethane foam is used as a sole insert in different styles of modern footwear. Polyols are a key component in the production of polyurethane foam. Therefore, increasing demand for polyurethane foam from various end-user industries will be a key driver for the growth of the global polyols market. 

Stringent environmental regulations on polyurethane foam production

Polyols are an important precursor material in producing polyurethane foam for various commercial and industrial applications. Polyurethane foam in its natural state is safe, biochemically inert, and non-toxic. It does not pose any danger to consumers or the environment. However, the polyurethane foam production process is extremely toxic and degrading to the environment. 

One of the main byproducts of the industrial production of polyurethane is the formation of methylene chloride. It is a colorless volatile liquid that is toxic to humans and harms exposed people's eyes, liver, kidneys, and heart. Methylene chloride is a major contributor to industrial air pollution. 

Many North American and Europe countries have imposed stringent environmental regulations to eliminate the menace posed by methylene chloride pollution. For example, in 2021, the U.S. government's environmental protection agency (EPA) invoked sections 112(d) and 112(k) of the Clean Air Act, banning the formation of methylene chloride at the source during the polyurethane foam production process. 

The regulations virtually stopped the production of different grades of polyurethane foam. Similar regulations in the European Union (E.U.) have also affected foam production. Many companies are currently relocating production to Asia; however, making up for the lost capacity will take years. It has curtailed polyurethane foam production and will be a major challenge to the growth of the global polyols market. 

COVID-19 impact on Polyols Market Growth

The COVID-19 pandemic began in early 2020 and caused massive disruptions in the global polyols market. Polyols are chiefly used in producing polyurethane foam, which is widely used in the automotive and construction industries. Both these industries were deeply affected due to the restrictions put in place by national governments to combat the pandemic. 

The decline in demand from various end-users for polyurethane foam created a subsequent decline in demand for polyols. It greatly impacted the revenue of many companies engaged in polyol production. The development of new and better formulations of polyols was also affected since companies significantly cut back on major capital expenditures due to drastic falls in revenue. 

Many countries in Asia-Pacific saw a receding of COVID-19 cases by late 2020 and governments in the region started cautiously reopening the economy in a phased manner. The automotive, footwear, and furniture manufacturing industries saw a massive increase in demand as companies rushed to cater to the pent-up demand from the pandemic. However, the overall recovery in the market was less than satisfactory as a second wave of the pandemic hit the world in early to mid-2021. A full recovery of global demand is not expected to occur before early 2022. 

A major challenge for the global polyols market in the post-pandemic period will be the ongoing shortage of essential raw materials caused by supply chain disruptions and logistical delays. It is bound to hamper the production of polyols and their dependent products even as global demand returns to normalcy. Despite these challenges, almost all major end-user industries will experience significant growth in the coming years. The demand for polyols will continue to increase in the coming years, shaping a long-term positive outlook for the global market. 

Polyols Market Segment and Shares

The global polyols market is segmented into type, application, end-user, and region. The polyols market by type is further segmented into polyether polyols and polyester polyols. Polyether polyol is leading within this segmentation since it is the most widely utilized type of polyol. Polyether polyol is primarily used to manufacture polyurethane foam of different rigidity. Polyurethane foam is used for interior insulation in construction, vehicle interiors, and car seats in the automotive industry. 

Polyols Market Geographical Analysis

Asia-Pacific is projected to have a leading share in the global polyols market. Following the liberalization of global trade in the 1990s, the bulk of global manufacturing shifted to Asia-Pacific. The region has become the primary global manufacturing hub. Nearly all major end-users of polyols, such as packaging, automotive, footwear, and construction industries, are located in Asia-Pacific. 

Polyurethane foam is produced from polyols, which are then utilized in the automotive industry for the interior of vehicle interiors such as cabins, dashboards, and car seats. China, Japan, India, Indonesia, and South Korea are the major countries with a well-developed national automotive industry. The automotive industry in Asia-Pacific has been experiencing rapid growth due to growing demand from consumers and businesses. The industry has nurtured an ecosystem for manufacturing automotive components, aided by technology transfer from international automotive conglomerates operating in the region. 

Asia-Pacific is a prime hub for the global footwear industry. China, India, Vietnam, Pakistan, and Bangladesh are among the major manufacturers of footwear in the region. Polyols are used in the manufacturing of semi-rigid and flexible polyurethane foam, which is used in sole footwear. 

The construction industry is experiencing rapid growth in Asia-Pacific due to increasing economic development and rising urbanization rates. Large-scale construction of commercial and residential buildings is currently ongoing in China, India, Indonesia, and Malaysia. Furthermore, large-scale public infrastructure projects such as bridges and metros are also under construction in various urban areas of the region. Polyurethane foam is chiefly used as an insulation material in the construction industry. 

Asia-Pacific has also emerged as a major global center for furniture production. Polyurethane foam made from polyols is used for mounting elements in mattresses and padding in the backrests and armrests of sofas. China, India, Vietnam, and Japan are major furniture manufacturers in Asia-Pacific. Due to the dynamic and fast-paced growth experienced by industries throughout the region, Asia-Pacific is expected to retain the largest regional share within the global polyols market. 

Polyols Companies and Competitive Landscape

The global polyols market is competitive since many polyols are currently manufactured with different physical and chemical properties. Many of the polyols are used for the manufacturing of polyurethane foam for specific end-users. The major players contributing to the market growth are BASF SE, Lanxess AG, Covestro AG, Royal Dutch Shell Plc, Dow, Mitsui Chemicals, Inc., Wanhua, Huntsman International LLC, Stepan Company, and Tosoh Corporation. The major players in the global polyols market adopt several growth strategies such as new product launches, improving the formulation of existing products, production capacity expansion, joint ventures, and collaborations to ensure the growth of the global industry.

BASF SE

Overview: BASF SE is a multinational chemical and engineering technology company. The company develops and manufactures resins, coatings, solvents, industrial gases, and petrochemicals. It is also a major producer of performance products and plastics. BASF SE also has a specialist division that manufactures pesticides, herbicides, vitamins, and animal feed. BASF Plant Science is an emerging company division that focuses on biotechnology research and development. The company has a global presence with subsidiaries, joint ventures, and more than 390 production sites in 80 countries. BASF SE was founded in 1865 by German engineer Fredrich Engelhorn and is headquartered in Ludwigshafen, Germany. 

Product Portfolio

• Lupranol 2007/1 is a highly reactive polyether glycol manufactured by BASF SE with hydroxyl groups. Lupranol 2007/1 is used to produce molded flexible and semi-rigid polyurethane foam. It is primarily intended for the manufacturing of polyurethane foam used in the production of consumer goods. The physical form of Lupranol 2007/1 is a colorless viscous liquid at room temperature. BASF SE supplies the product in industrial drums and recommends storage in certain conditions where the ambient temperatures do not exceed 60 °C.

Key Developments: 

• In November 2020, BASF SE introduced a new polyol material, Lupraphen 2602/1, which produces environmentally friendly low-emission foams in passenger and commercial vehicles.