Global plastic demand: breakdown by product, region and use?

Global plastic demand

Global plastic is estimated at 470MTpa in 2022, rising to at least 800MTpa by 2050. This data-file is a breakdown of global plastic demand, by product, by region and by end use, with historical data back to 1990 and our forecasts out to 2050. Our top conclusions for plastic in the energy transition are summarized below.

Global plastic demand is estimated at 470MTpa in 2022. For perspective, the 100Mbpd global oil market equates to around 5bn tons per year of crude oil, showing that plastics comprise almost 10% of total global oil demand.

Global plastic demand by region. The top billion people in the developed world comprise 12% of the world’s population, but 40% of the world’s plastic demand. We see developed world plastics demand running sideways through 2050, while emerging world demand doubles from 300MTpa to 600MTpa (charts below).

Global plastic demand CAGR? Our numbers are not aggressive and include a continued deceleration in the total global demand CAGR, from 7.5% pa growth in the twenty years ending in 1980, to 6% pa in the twenty years ended 2000, to 3.3% pa in the twenty years ended 2022 and around 2% pa in the decade ended 2050.

Global plastic consumption per capita. Our numbers include an enormous policy push against waste in the developed world, where consumption today is around 170 kg of plastics per person per year, and projected to decline gently to 160 kg pp pa by 2050. Conversely, plastic demand in the emerging world is 75% lower and averages 40 kg pp pa today, seen rising to 70 kg pp pa by 2050.

Upside to plastics demand? What worries us about these numbers is that they require historical trends to shift rapidly. Historically, each $k pp pa of GDP is associated with 4kg pp pa of plastic demand. But our numbers assume declining demand in the developed world and slowing demand in the emerging world (chart below).

Please download the model to stress-test your own variations, but there are conceivable scenarios where global plastic demand surpasses 1GTpa by 2050. Underlying inputs are drawn from technical papers, OECD databases and Plastics Europe. The forecasts are our own.

Plastic demand by end use is broken down in the chart below. 35% of today’s plastics are used as packaging materials, 17% as construction materials and c10% for textiles.

The strongest growth outlook is in electrical products (currently 7-9%) and light-weighting transportation. There are few alternatives to plastics in these applications. Conversely, for packaging materials, we see more muted growth, and more substitution towards bioplastics and cellulose-based products from companies such as Stora Enso.

Upside for plastics in the energy transition is especially important, with plastics used in important components of the energy transition, from EVA encapsulants used in solar panels, to the resins used in wind turbine blades, to strong and light-weight components in more efficient vehicles, to polyurethane insulating materials surrounding substantively all electric components, batteries and vehicles. Of particular note are fluorinated polymers, where the C-F bond is highly inert, and helps resist degradation in electric vehicle batteries.

Plastic demand by material is broken down in the chart below. Today’s market is c20% polypropylene, c15% LDPE, and other large categories with >5% shares include HDPE, PVC, PET, Polyurethanes and Polystyrenes. We think the strongest growth will be in more recyclable plastics, materials linked to the energy transition, and next-gen materials that underpin new technologies such as additive manufacturing.

Feedstock deflation is likely to be a defining theme in the energy transition, as many polymers draw inputs from the catalytic reforming of naphtha. Today, 70% of BTX reformate is blended into gasoline, but we see this being displaced by the rise of electric vehicles, with particular upside for the polyurethane value chain.

Decarbonizing plastic production is also a topic in our research. As a starting point, our ethane cracker model is linked here, and our economic model for converting olefins into polymers is here. CO2 intensity of different plastics from different facilities is tabulated here.

Plastic recycling. We also see potential for plastic-recycling technologies to displace 8-15Mbpd of potential oil demand growth (i.e., naphtha, LPGs and ethane) by 2060, compared to a business-as-usual scenario of demand growth. All of our plastic recycling research is linked here. After a challenging pathway to de-risking this technology, we see front-runners emerging, such Agilyx, Alterra and Plastic Energy.

Polyurethanes: what upside in energy transition?


Polyurethanes are elastic polymers, used for insulation, electric vehicles, electronics and apparel. This $75bn pa market expands 3x by 2050. But could energy transition double historically challenging margins, by freeing up feedstock supplies? This 13-page note builds a full mass balance for the 20+ stage polyurethane value chain and screens 20 listed companies.

Propylene oxide: production costs?

Propylene oxide production costs

Propylene oxide production costs average $2,000/ton ($2/kg) in order to derive a 10% IRR at a newbuild chemicals plant with $1,500/Tpa in capex. 80% of the costs are propylene and hydrogen peroxide inputs. 60-70% of this $25bn pa market is processed into polyurethanes. CO2 intensity is 2 tons of CO2 per ton of PO today, but there are pathways to absorb CO2 by reaction with PO and possibly even create carbon negative polymers.

Global production of propylene oxide is estimated at 12MTpa in 2022, implying a $25bn pa market at an average propylene oxide cost of $2/kg.

Propylene oxide production costs are modeled in this data-file, and most likely run at $2/kg ($2,000/ton to derive a 10% IRR at a plant costing $1,500/Tpa.

Specifically we have modeled the HPPO process, forming propylene oxide via the exothermic condensation reaction between propylene and hydrogen peroxide, in methanol solvent, catalysed by titanium silicalite (TS-1). Although as noted in the data-file there are alternative production routes, such as the chlorohydrin process and the styrene monomer process PO process. HPPO seems like the front-runner solution for new plants.

Capex costs of propylene oxide plants are estimated based on recent project announcements (chart below). Our base case estimate is $1,500/Tpa of propylene oxide capacity.

Propylene oxide production costs
Capex costs of propylene oxide production facility

Propylene and hydrogen peroxide inputs comprise 80% of the final costs of propylene oxide.

Two thirds of the propylene oxide market today is alkoxylated to form polyols for use as building blocks for polyurethanes.

Vertical integration across petrochemicals? US propylene oxide producers include LyondellBasell (600kTpa at Bayport TX, 550kTpa at Channelview TX), Dow (725kTpa at Freeport TX, 330kTpa at Plaquemine LA) and Huntsman (240kTpa at Port Neches TX).

CO2 intensity of propylene oxide is estimated at 2 tons of CO2 per ton of propylene oxide, which in turn, is largely inherited from the commodity inputs as well. You can stress test this in the data-file.

What is interesting about propylene oxide is the COC epoxide unit is strained, hence it can react with CO2 to form compounds such as propylene polycarbonate (first chart below) or polycarbonate polyols (second chart below). Note that polyurethanes polymerize with diisocyanates to form polyurethanes.

Propylene oxide production costs
Propylene oxide reacts with CO2 to yield polypropylene carbonate
Propylene oxide reacts with CO2 and an OH initiation to yield a polycarbonate polyol which can be a precursor for polyurethanes

In other words, these propylene oxide reaction products can absorb CO2 and prevent its emission into the atmosphere (effectively a type of CCS).

However the maths in the data-file show that propylene carbonate (first chart above) is 57% propylene oxide by mass (gross emissions of 2 tons of CO2 per ton of propylene oxide in our base case) and 43% CO2 (1 ton of CO2 avoided per ton of CO2) and hence while this building block absorbs CO2, it cannot entirely be said to be carbon negative today.

However, the best route to decarbonize propylene oxide is via decarbonizing the hydrogen peroxide inputs using lower-carbon hydrogen. This is also increasingly incentivized by the US IRA. Companies pursuing this CO2-absorbing polyurethanes include Novomer (acquired by Aramco) and Empower Materials.

Please download the data-file to stress test propylene oxide production costs, as a function of propylene prices, hydrogen peroxide prices, capex, opex, electricity, labor costs, O&M costs, CO2 prices and tax rates. Detailed notes are also laid out in the notes tab.

Naphtha cracking: costs of ethylene, propylene and aromatics?

Naphtha cracking costs

Naphtha cracking costs $1,300/ton for high value products, such as ethylene, propylene, butadiene and BTX aromatics, in order to derive a 10% IRR constructing a new, greenfield naphtha cracker, with $1,600/Tpa capex costs. CO2 intensity averages 1 ton of CO2 per ton of high value products. This data-file captures the economics for naphtha cracking, which matters, as a cornerstone of the modern materials industry.

Naphtha cracking is the dominant source of petrochemical building blocks, especially in Europe and Asia, and a crucial starting point for producing modern polymers, crucial materials, which are needed for consumers and across our energy transition research.

What is naphtha? Naphtha is the C6-C12 fraction from oil refineries, containing molecules with typical boiling points of 60-200ºC.

What is naphtha cracking? Naphtha is mixed in a 2:1 ratio with steam, super-heated to 700-900◦C to start “breaking bonds”, then quickly quenched to control the product mix, which is later fractionated.

The purpose of the steam is to minimize coking, which deposits carbon on process units and requires shut-downs for maintenance. A more detailed description of the overall process is laid out in the data-file.

A methodological challenge for appraising the costs of naphtha cracking is the complexity. Around 230 reactions, involving 80 chemical species feature in process sheets.

Our suggestion to simplify the complexity of naphtha cracking is to think about yields as comprising 55-60% olefins (ethylene, propylene, etc), 15-20% fuel gases (which are recirculated and burned to provide heat for the highly endothermic cracking reaction and high-pressure steam), 10% aromatics (BTX), 5% pentanes and hexanes, and 10% heavier fractions which are most likely sent back to adjacent refinery units (chart below).

Naphtha cracking costs
Typical yields of naphtha cracking

For modelling the economics of naphtha cracking, we consider the olefins and aromatics ‘high value’ molecules and they comprise around 65% of the product mix.

Typical capex costs for naphtha crackers run to $1,600/Tpa of input capacity, which equates to $1,700/Tpa of outputs and $2,500/Tpa of high-value outputs (chart below). Underlying details are in the data-file, based on public disclosures from recent projects.

Naphtha cracking costs
Capex costs of naphtha crackers are estimated to average $1,750 per ton pa of inputs

Economics of naphtha cracking. Generating a 10% IRR at a greenfield naphtha cracker requires a high value product price of $1,300/ton. Generally pricing will be highest for butadiene, then propylene and aromatics, and lower for ethylene. Ethylene is also produced via dedicated ethane crackers.

Naphtha cracking cost breakdown? 60% of costs are associated with naphtha inputs, although this depends on the oil price, which can be flexed in the model. In our recent research, we argue that the rise of electric vehicles will dent demand for naphtha more rapidly than other oil fractions, which may lower feedstock costs and boost margins in petrochemicals, especially creating upside for polyurethanes in the energy transition.

Another c10% of naphtha cracking costs are associated with heat, electricity and CO2 prices, which can also be varied in the data-file. Energy costs are quantified from technical papers, across electricity use and heat use, both measured in kWh/ton (or GJ/ton, if you prefer those units).

CO2 intensity is estimated at around 1 ton of CO2 per ton of high value products in our build-up. Some regions have chosen to add higher CO2 prices than others. Some studies that have crossed our desk report higher CO2 intensities, although often this is a definitional issue, as similar CO2 overall emissions get ascribed to different products (e.g., should CO2 be ascribed by product mass or product value?).

Some of the leading companies providing naphtha cracking process technologies include Lummus, KBR, Technip Energies, Linde, Axens. A useful table of crackers in Europe is published by Petrochemicals Europe. A listed downstream company in Central Europe is also currently expanding its naphtha cracking capacity.

Crude to chemicals: there will be naphtha?

Oil markets are transitioning, with electric vehicles displacing 20Mbpd of gasoline by 2050, while petrochemical demand rises by almost 10Mbpd. So it is often said oil refiners should ‘become chemicals companies’. It depends. This 18-page report charts petrochemical pathways and sees greater opportunity in chemicals that can absorb surplus BTX.

Newlight AirCarbon: bioplastics breakthrough?

Newlight is a private company, founded in 2003, based in California, aiming to convert (bio-)methane and air into polyhydroxybutyrate (PHB), a type of polyhydroxyalkanoate (PHA), a biodegradable bio-plastic which is marketed as AirCarbon. The product is said to be carbon negative, biodegradable, strong, “never soggy”, dishwasher safe. Our AirCarbon technology review found some good underlying innovations, but was unable to de-risk cost and capex aspirations.

Global plastic demand likely rises from 470MTpa in 2022 to almost 800MTpa by 2050 (model here). Biodegradable bioplastics are a particularly fast-growing segment of the market (overview here).

Hence this data-file presents our conclusions from reviewing patents filed by Newlight, a private company that is commercializing AirCarbon, a biodegradable bioplastic, polyhydroxybutyrate, which is a type of polyhydroxyalkanoate.

What is PHB? Polyhydroxybutyrate is a type of bioplastic produced by micro-organisms (especially methane-consuming bacteria), in response to physiological stress, as a form of energy storage when nutrients are scarce.

Newlight is already delivering AirCarbon to brands such as Nike, Target, Shake Shack, US Foods, H&M, Ben & Jerrys, and hotel chains, from its Eagle 3 demonstration plant, which produced 60M “units” in 2022 (although this might imply relatively small volumes, of around 300Tpa, if we assume a mix of 0.5 gram straws and 10 gram cutlery items?).

Newlight’s goal through 2025+ is to scale up production into the 10s and 100s of kTpa, and displace synthetic plastics, especially in the $140bn pa foodware market, $30bn pa fashion products market, $64bn pa diaper/personal care market and automotive industries.

Does Newlight have a breakthrough technology for PHB production? Producing PHB from methane is complex with over 10 different processing stages. The patents focus particularly upon one stage, which may be a rate limiting stage, enhancing the production of one out of two possible variants of an enzyme. Details, numbers and yields have been gleaned from reviewing Newlight’s patents and are noted in the data-file.

Is PHB carbon negative? Reading between the lines of its patents, we think methane is most likely to be sourced from landfill gas. And the process screens as carbon negative relative to a baseline alternative where the landfill gas or methane was simply vented to the atmosphere. In our view, this is not strictly ‘carbon negative’, but may be ‘Scope 4 negative‘.

What does PHB cost? Attempts to commercialize PHB bioplastics go back to ICI in the 1980s, but have struggled to compete economically. PHAs on the market today tend to have a cost of $2.5 – 6/kg, versus synthetic plastics closer to $1-1.5/kg.

What are the capex costs of producing bioplastics? We would typically assume $1,300/Tpa for an ethane cracker, $1,500/Tpa for an integrated crude to chemicals plant, but think bioplastics plant capex will be in the range of $10,000-50,000/Tpa.

Can we de-risk a breakthrough in our AirCarbon technology review? The purpose of our patent reviews is to use an apples-to-apples framework, to assess whether we can de-risk technologies in our roadmap to net zero. We were not entirely able to de-risk a widespread breakthrough in our AirCarbon technology review, for reasons noted in the data-file.

Acetylene: production costs?

Acetylene production costs are broken down in this data-file, estimated at $1,425/ton for a 10% IRR on a petrochemical facility that partially oxidizes the methane molecule. CO2 intensity is over 3 kg/kg. Up to 12MTpa of acetylene is produced globally for welding and in petrochemicals.

Acetylene is a gas with the composition C2H4 (H-C≡C-H), formed via three main production pathways, used mostly as a petrochemical feedstock, but also in welding and metal-working. The gas was discovered by Edmund Davy in 1836. However, Walter Reppe (1892-1969) of BASF is considered the founder of modern acetylene chemistry, creating a safe process to handle acetylene at 25 bar pressures..

Market sizing data on the global acetylene market is highly variable, with different commentators reaching starkly different numbers. One reason is that many integrated petrochemical facilities produce their own acetylene on site, and only a small share of production is sold onwards. Upper estimates that have crossed our screen imply around 12MTpa of acetylene production in 2022.

Acetylene use in the petrochemical industry consumes around 70-80% of global market volumes. It is an important gas because the C≡C triple bond can easily be vinylated to produce H-X compounds. This pathway yields vinyl acetate, acrylonitrile, acetaldehyde and butane-1,4-diol for polyurethanes such as ‘spandex’. BASF discloses that up to 20 processes at Ludwigshafen use acetylene as an input.

Acetylene use in the welding and metal-working industry consume around 20-30% of global market volumes. This is because of acetylene’s combustion properties, forming a very high flame temperature around 3,000◦C, high enthalpy of combustion of 50 MJ/kg, a fast flame speed of 10-12 m/s versus 2-6 m/s for other gases and a low moisture content in the exhaust gas. Oxy-acetylene flames cut quickly, saving cost. And ferrous metals are often flame hardened, to improve their longevity, which requires a hot and low moisture flame. Although we wonder whether electric arc welding will increasingly displace acetylene.

Production of acetylene occurs via three main pathways. We think the dominant process in the West is partial oxidation of methane, at very hot temperatures, around 2,000-3,000◦C. Another method purifies acetylene by-products from ethane cracking. A third pathway uses a reaction between calcium carbide and water to form C2H2 and calcium hydroxide.

Acetylene production costs are estimated at $1,425/ton in this data-file, in order to earn a 10% IRR on a large production facility, and after reflecting capex costs, feedstock gas prices, heat, electricity, cryogenic oxygen, opex costs and CO2 prices. Production costs are most sensitive to input gas prices, and recent gas prices from 2022 can result in cash costs around $2,500/ton in Europe, almost 2x normal levels.

Energy intensity is high, as the partial oxidation reaction of methane forms large quantities of CO and water vapor. 3 CH4 + 3 O2 → C2H2 + CO + 5 H2O, in order to generate high reaction temperatures that yield acetylene. We estimate the CO2 intensity of acetylene production is over 3 tons/ton (Scope 1+2 basis), which flows through to the embedded CO2 intensity of products in downstream value chains.

Companies producing acetylene include many of the usual suspects in chemicals and industrial gases, such as BASF, Linde, Air Products, Air Liquide, Praxair, LyondellBasell, Asia Technical Gas and many Chinese producers. All of our petrochemicals research is summarized here.

Purified terephthalic acid: PTA production costs?

This data-file captures PTA production costs, breaking down the costs of producing purified terephthalic acid (PTA), a chemical intermediate that gets polymerized with ethylene glycol, in order to make PET, for packaging materials (bottles, clam-shells) and for fibers (polyester, the most commonly used textile fiber on Earth).

A PTA price of $800-850/ton is needed to earn a 10% IRR across an integrated petrochemical facility, which first catalytically reforms naphtha into BTXs, then separates out the paraxylene (PX), then oxidizes the paraxylene into crude TA, and finally purifies the PTA.

PTA is most commonly polymerized into PET, the most commonly used textile on planet Earth, also used for packaging materials, as summarized in the chart below and in our polyester note here.

Capex costs across an integrated PTA petrochemical value chain might run to around $1,300-1,500/Tpa, including both the paraxylene line and the PTA line, and our numbers are informed by aggregating capex costs of PTA plants, capex costs of paraxylene plants and capex costs of naphtha reformers (chart below).

The CO2 intensity of PTA is estimated at 1.45 kg/kg (i.e., kg of CO2 per kg of PTA), of which 1.3 kg/kg is embedded in the paraxylene inputs, of which in turn, the largest contributor is process heat for the cracking/reforming of naphtha. Energy costs are a major contributor to PX production costs, but less significant for oxidizing PX into PTA.

How does the cost of feedstock affect PTA economics? Each $10/bbl variation in the oil price reduces the marginal cost of PTA production by around $50/ton, as a rule of thumb. Or alternatively, at constant pricing, $10/bbl lower oil inputs improve full cycle IRRs by around 3 percentage points. Sourcing low cost naphtha could therefore provide a major uplift, especially as the rise of electric vehicles displaces naphtha demand in our oil models.

To reach these numbers, this data-file contains two separate models, which are then added together. The first model captures the production costs of paraxylene, from naphtha as an input. The second model captures the production costs of PTA, from paraxylene as an input.

Notes into the PTA production process are also set out in the final tab of the model. Oxidation of PX into crude terephthalic acid (CTA) takes place at 175-225◦C and 15-30 bar of pressure (to keep PX as a liquid). Separating out the PTA uses a crystallizer, steam heating and pumps/blowers to drive off the liquid. Acetic acid is used as a solvent and small portions are consumed (not recovered).

Other inputs can be stress-tested in the model, such as capex costs, O&M costs, labor rates, uptime and utilization, process efficiency, gas prices, electricity prices, CO2 prices and tax rates. Some sensitivity analysis is plotted above, showing how these variables impact costs, including in different regions. We have also written a summary aggregating all of our plastics research.

Polyester: production process?

Polyester is the most produced textile fiber on Earth. Of the world’s 8GTpa of oil and gas production, 80MTpa, or 1%, ends up as PET, via eleven chemical processing stages that span naphtha-reforming, BTX separation into paraxylene, oxidation to PTA, plus ethane cracking, ethylene oxide and ethylene glycol. This data file covers the polyester production process, step by step, including yields and reaction conditions.

Global textile production stood at around 110MTpa in 2021, of which 60MTpa is polyester (and c50MTpa is PET), 25MTpa is cotton, 10MTpa is other polymers, 6MTpa is cellulosics (e.g., linens from flax, hemp, jute), 1-2 MTpa is wool, c1-2MTpa is leather.

Uses of polyester? Statistically, there is a c50% chance that the shirt on your back is made of hydrocarbons derived from the chemical processes described in this data-file and spun into PET fibers. But note that the uses of fibers are also broader than just clothing. Solar panels often use PET as an underlying layer of their backsheet.

Uses of PET? Global production of PET stands at 80MTpa. 50MTpa is used as textile fiber. And another 30MTpa is used as a plastic packaging material, e.g., for water bottles and clam-shell food containers. Note that our database of global plastic production only counts the 30MTpa of PET used as packaging material, while PET used in textiles are counted separately. Some classifications do not even count them as “plastics”. Because, well, they don’t look like other plastics or feel like other plastics.

The polyester production process? This data-file gives an overview of polyester production, specifically PET fiber production process, building up from first principles, covering inputs, outputs, mass balances, yields and reaction conditions.

There are eleven separate chemical processes in the value chain for producing PET, the hottest of which reaches 800ºC (ethane cracking), the coldest of which reaches -200ºC (cryogenic air separation), but the average process takes place at 200ºC.

PET is produced from the condensation polymerization of PTA and ethylene glycol at 220-260ºC and 3-6 bar pressure. The PTA is produced from the catalytic oxidation of paraxylene (e.g., using BP’s Amoco process), which in turn is derived from catalytic reforming of naphtha. The ethylene glycol is produced from hydration of ethylene oxide (e.g., using Shell’s OMEGA process), which in turn is derived from cracking ethane, which is the most common NGL during the fractionation of natural gas.

There are three sources of upside for PET in the energy transition. Most interestingly, the electrification of vehicles will lower demand for motor gasoline, tempting refiners to flow less reformate into the gasoline pool, and more reformate into BTX for chemicals, with the overall effect of lowering the input costs for PTA? Effectively, there is a pathway where the electrification of vehicles improves the margins of polyester producers?

Similarly, if gas is ramped up to displace 2-2.5x more CO2 intensive coal, this will yield more ethane as a by-product, which may flow through to lower input costs for ethane crackers, and ultimately lower the input costs of ethylene glycol.

Third, PET is one of the few polymers that is already fully recyclable, which is also an advantage for sustainability. In our broader research, we have looked at next-gen PET recyclers, such as Carbios.

Land use of global textile production? Producing 25MTpa of cotton ties up 85M acres of land globally. This matters as deforestation has driven 25-30% of all anthropogenic emissions historically (data here and here). In principle, if 85M acres of land could be reforested, it would absorb c500MTpa of CO2, or 1% of today’s global CO2 emissions.

Leading companies in polyester value chains? The world’s largest PET producers include Indorama (Indonesia), Alpek (Mexico), Yasheng, Sanfame, CRC, FENC (China) and Reliance (India). Across the input value chain, leading PTA producers also include BP, Sinopec, Reliance, SABIC, Lotte; and leading ethylene glycol producers include Shell, Dow, SABIC, BASF, Sinopec, Formosa, Reliance, et al.

Polyurethane: leading companies?

This data-file is a screen of leading companies in polyurethane production, capturing 80% of the world’s 25MTpa market, across 20 listed companies and 3 private companies. We see growing demand for polyurethanes — especially for insulation, electric vehicles and consumer products — while there is also an exciting prospect that EVs displace reformates from the gasoline pool, helping to deflate feedstock costs. So who benefits?

This screen of polyurethane producers captures about 80% of all global polyurethane production, across 23 chemicals companies, across different parts of the value chain.

Global production of polyurethane stands at around 25MTpa as of 2022, with major uses in insulation materials, elastic fibers (e.g., spandex/lycra), foamed furniture materials such as mattresses, consumer products like shoes, vehicles, electrical products and adhesives/resins. The World Cup Football famously incorporated polyurethanes from Covestro. Global plastics production, by polymer, is quantified here.

Five companies dominate the polyurethane industry and produce over half of all global polyurethanes, of which two are listed in Germany, two are listed in the US and one is listed in China. 5-7 lines of key details on each company are summarized the data-file, including product exposures, geographic exposures and CO2 intensity.

Are polyurethane producers concentrated or diversified? Concentration varies widely by company. The median company in the screen is diversified, and derives just 10% of its business from polyurethanes. Although seven companies derive over half of their revenues from polyurethanes and five are over 80% concentrated.

Are polyurethane producers integrated? Some companies in our screen simply purchase polyols and dio-isocyanate intermediates as commodity chemicals, and specialize in their polymerization, foaming, and forming into products (e.g., one company in the screen has a 30-40% market share for mattresses in geographies such as India and Australia). Others are vertically integrated all the way back to naphtha, benzene, toluene or propylene inputs.

Inorganic activity has also been prevalent in the polyurethanes business, as some companies have suffered from weak 3-7% margins and ROICs, especially in challenging geographies. Dow and DuPont famously merged and then unmerged. Thailand’s PTT has been buying up niche polyurethanes businesses. And Aramco bought Novomer’s CO2-absorbing polyols technology for up to $100M back in 2016.

The polyurethane industry is opaque and complex, hence this data-file is not going to be perfect. We have used our best guesses from public disclosures, and triangulation of reported reports, to make informed estimates, breaking down volumes for the leading companies in polyurethane. All of our plastics and polymers research is summarized here. For further details please see our outlook for polyurethane in the energy transition.

Copyright: Thunder Said Energy, 2019-2023.