Chemical profile: US polyols
Uses
The primary use for polyols is in the production of polyurethane (PU) foams. Polyurethane foams are produced by the combination of a polyol and an isocyanate. The two most common commercial isocyanates are methyl di-p phenylene isocyanate (MDI) and toluene di-isocyanate (TDI).
Rigid PU foams are used mainly in insulation, refrigeration, packaging and construction, while flexible PU foams have applications such as upholstery, mattresses and seats. Polyols can also be used in elastomers, adhesives, coatings and fibres.
There are two main types of polyols – polyether polyols and polyester polyols, with polyether polyols more widely used. Polyester polyols compete with polyether polyols and may be preferred in some rigid foam applications because of their low cost and improved flame retardant properties. In addition, they can provide improved wear resistance and chemical resistance in elastomers, coatings, sealants and adhesives.
Supply/Demand
The North American polyols market is structurally long, with usage capped by the availability of PU co-feedstock such as isocyanates rather than polyol supply issues.
Persistent supply shortages for MDI and TDI during 2017 and the first quarter of 2018 along with a steep escalation of prices led to some slowdown in polyols demand. However, improving supply for MDI and TDI is likely to lead to an increase in polyols consumption in the second half of 2018.
Trade tensions between the US and China may alter the supply picture as polyols are included among the items listed for the application of additional tariffs. The US imports polyols from China.
Demand for PU foams has seen healthy growth in North America in recent years as the insulating properties of PU foams provide energy efficient solutions. According to a survey from IAL Consultants, PU production in the countries comprising the North American Free Trade Agreement (NAFTA) rose 4.4% from 2014 to 2016 to eclipse levels last seen prior to the 2008 recession.
Prices
US polyether polyols have been firming in recent months, driven by higher prices for propylene feedstock. During May and June, propylene contracts posted a cumulative jump of 13 cents/lb ($287/tonne), prompting increase initiatives for polyols ranging from 8-13 cents/lb.
US prices for polyether polyols are largely driven by feedstock costs and typically follow movements in propylene contract prices with a lag of one to two months.
Prices may find support throughout the second half of the year as propylene feedstock supplies are expected to remain tight given the shift to lighter cracker feedslates and operational issues at propane dehydrogenation (PDH) plants.
Higher logistics costs are also supporting higher polyols prices. An acute shortage of truckers has prompted US trucking companies to implement multiple freight increases while several chemical producers have either raised their freight adders or cited rising transportation costs as a factor in announced product price increases.
Technology
Polyether polyols are produced by the catalysed addition of epoxides, mainly propylene oxide (PO) or ethylene oxide (EO), to an initiator having active hydrogens. The most common catalyst is potassium hydroxide.
The reaction is
carried out by a discontinuous batch process at raised
temperatures and pressures in an inert atmosphere. After
polymerisation, the catalyst is neutralised and removed by
filtration. The polyol is then purified.
The choice of epoxides, initiator, reaction conditions and catalyst determines the physical properties of the polyol, which can range from low molecular weight polyglycols to high molecular weight resins.
Click here to see A full list of plants and projects capacities, forecasts, production volumes and operating rates are available on the ICIS Supply and Demand database
Outlook
US polyols demand is expected to continue to gain ground in the coming years along with the anticipated rise in demand for polyurethane systems.
The excellent insulating properties of polyurethane foams are likely to ensure demand increases as end-users seek more energy efficient products while new polyurethane foams are being developed for applications in athletic shoes and liners for truck trailers.
Polyols production technologies may also witness some changes as newer and more sustainable production methods are being pioneered by several companies. Saudi Aramco and Covestro are working on commercialising processes to produce polyols from carbon dioxide, while Emery Oleochemicals has launched a new line of polyols with a high level of bio-based content.
No new polyols plants have been announced in the North American market.