Coatings World - March 2016

China

By Arnold Wang China Correspondent

Burdens on China coatings producers pile up because of soft downstream market. According to the statistics from the
China Polyurethane (PU) Industry Association,
the output of PU coatings was 750 thousand
tons in the first half of 2015, it grew by 7.1
percent over the same period of 2014 and the
output of polyurethane adhesives and seal-
ants is around 300 thousand tons in the first
six months of 2015, equal to the same period
in 2014. The main downstream markets for
polyurethane coatings, including furniture and
floors, automotive and construction as well as
transportation, all slowed their growth in 2015.
The automotive market in 2015 only grew by
4. 7 percent, compared with 7 percent in 2014.
Although the market demand for houses and
apartments was still growing, the total area
for new constructed houses and apartments in
2015 decreased by over 14 percent, coinciding
with the central government’s strategy of reduc-
ing inventory in the real estate market in the
hope of reviving this important market, a major
pillar to China’s economy.

On the contrary, all the upstream markets for polyurethane, including MDI, TDI, PO, AA and BDO, are facing some level of oversupply challenges. But the whole PU industry still sees new capacities coming. In August 2015, BASF started production of MDI at its wholly owned company in Chongqing, the largest municipality city in west China. BASF invested $1.25 billion to build the 400,000 tons/year MDI facility since 2011. BASF said the new MDI facility will support the key industries in the western parts of China.