On 12 and 13 April, over 300 participants from the flexible PU foam supply chain attended the annual conference of EUROPUR, the European Association of Flexible Polyurethane Foam Blocks Manufacturers, in Krakow. As every year, a detailed market report on the flexible PU foam industry in wider Europe (EEA, Russia, Turkey, Ukraine and the Balkans) compiled by Labyrinth Markets and Research Ltd for EUROPUR was part of the much anticipated presentations at the event. Data was collected and aggregated by EUROPUR and Labyrinth Markets and Research directly from foam producers in February and March 2018. Interviews with over 50 experts from the industry were carried out in addition for qualitative comments.
Figures reported show that the flexible PU foam industry has experienced a growth in production tonnage of 3.9 % overall in the area in 2017 to reach a total of nearly 1.4 million tonnes. This growth is however not equally shared among all regions and applications since polyether foam production grew by 3.6% to reach nearly 1.3 million tonnes, while polyester foam production, supported by continued demand from the automotive sector notably, grew by 8% to just under 82,000 tonnes.
Looking at regional differences, one notes that production in the EEA has been limited to 1.8% while Russia and Turkey experienced much stronger growth, up to 12.6% for Turkey. Within the EEA itself, production is mostly flat in Western Europe with most of the growth occurring in Poland, Romania and Bulgaria.
The turnover of the industry grew by nearly 20% to reach around 5 billion EUR. But this figure should not lead to optimistic conclusions as it was mostly led by partial transfer of the price increase of diisocyanates over the past 1.5 years. Since April 2016, the price of TDI increased by around 90% in Europe according to Tecnon Orbichem, which is unprecedented in speed, amplitude and duration. This had an impact on the price of flexible polyurethane foam and created major difficulties for the downstream supply chain (foam producers and their customers), who have had to absorb part of the price increase internally in a context of moderate inflation and increased availability of lower cost alternatives to PU foam. Investment in new plant and equipment has also stalled.
Already in June 2017, leading players of the flexible foam industry highlighted the risk that high diisocyanate prices may slow polyurethane growth in an interview given to Urethanes Technology International relayed by Rubber News.com.
The predictions made in that interview are now verified by data and confirmed by the experts consulted by Labyrinth Markets and Research. Foam producers and their customers are adopting a number of strategies to “save” on diisocyanates. Some seek to change formulations or produce lower density foams while others focus on producing higher added-value foams. In downstream industries, there is also a clear trend to reduce the amount of foam used, notably in the bedding and furniture industry where major players increasingly consider alternative upholstery and mattress cores. There are also indicators of change in markets where full PU foam mattresses were traditionally an undisputed market leader. In the technical foam sector, where competing materials are less easy to implement for most applications, this trend does not seem to be reflected currently.
In addition to the presentation made at EUROPUR’s annual conference, results of the research made by Labyrinth Research and Markets Ltd will be compiled into a comprehensive report for EUROPUR members and an extensive summary will be published in a forthcoming issue of PU Magazine International.