Polyols Procurement Intelligence Report 2025-2030

Polyols Supply-Demand Overview

Increase in the applications of polyols in the areas of coating, adhesives, sealants, and elastomers fuel growth in the polyols procurement market. Further, the increasing demand for bio-based polyols due to environmental concerns and increased preference for sustainable products are others driving the trend.

Polyols Cost Structure

The cost modeling of polyols production is mainly influenced by raw materials, energy, catalysts, operational expenditures, and regulatory compliance. The polyols procurement report states that raw materials, together with energy and catalysts, represent the most expensive segment of the market, in terms of production costs of polyols.

The polyols procurement report further indicates that the pricing models are going to be crucially dependent on the prices of raw materials, which occupy the largest niche in that cost structure, to include polyhydric alcohols, glycols, and dicarboxylic acids. Energy costs will become significant as the heating and polymerization are usually required in its production. In addition, catalysts, operational expenses (including labor and maintenance), and transport costs further affect the polyols procurement market. Moreover, compliance with the increasing environmental regulations in the manufacture of bio-based polyols can further complicate this cost, although through sustainable practices it could also mean long-term cost savings.

Heavy metal salts of potassium hydroxide or sodium hydroxide have an immense value in the fabrication of polyols. The cost of catalysts is relatively less when compared to those of raw materials and energy. Further, the polyols procurement report predicts the use of advanced catalysts in the production of bio-based polyols, aiming for sustainability, may increase costs slightly, although it can ultimately yield price stability and environmental compliance.

Polyols Pricing Trends

Pricing trends in the polyols procurement market have experienced fluctuations due to varying factors such as raw material costs, energy prices, and global supply-demand dynamics. Raw materials are largely influenced by fluctuations in the crude oil and natural gas market, which results in periodic volatility in terms of polyols sourcing. However, in recent years, upward pricing pressure might also have resulted from supply chain disruptions due to the COVID-19 pandemic and increased demand for bio-based polyols arising from sustainability trends. However, the increasing availability of bio-based feedstocks and advancements in production technologies are expected to stabilize prices according to the polyols procurement report. 

Polyols Procurement Best Practices

Best practices, according to the polyols procurement report, are heavily influenced by the need for cost efficiency, quality consistency, and timely delivery of raw materials, including polyhydric alcohols, glycols, and dicarboxylic acids. Buyers are typically engaging in longer contracts with suppliers to ensure negotiation strategies, mainly as the prices of raw materials are constantly affected by the crude oil and natural gas pricing markets. Strategic sourcing is also being used to limit the supply risks and hence procurement may involve a mix of local and global suppliers aimed at balancing cost and supply security. 

Additionally, as a growing trend, observed in the polyols procurement report, companies are dedicating an increasing number of resources to sustainable procurement, choosing bio-based polyols or raw materials to meet consumer and regulatory demands for greener products. Collaborations with suppliers are also increasing to ensure compliance with regulatory standards while fostering further innovations. Procurement teams also focus on supplier diversification and fostering relationships to avoid dependency on a single source, reducing the risks associated with industry disruptions or geopolitical uncertainties.

Key Players in the Polyols Industry

Recent Developments in the Polyols Industry

• In September 2022, Covestro introduced more sustainable polyether polyols based on bio-circular raw materials, alongside renewable toluene diisocyanate (TDI) and climate-neutral methylene diphenyl diisocyanate (MDI), enabling the production of polyurethane foams with alternative raw materials. Using the mass balance approach, which allocates biowaste and residual materials to products, this innovation reduces carbon footprints while maintaining the same high quality as fossil-based products. These polyols are applicable in prepolymers for adhesives and PU foams used in insulation, furniture, car seats, and shoes, aligning with Covestro’s sustainability goals.
• In October 2020, Huntsman Corporation inaugurated a 22,000-ton TEROL® aromatic polyester polyols plant in Kuan Yin, Taiwan, marking its first facility outside the United States. The plant, completed in May 2020, upcycles nearly half a billion PET bottles annually to produce polyols for MDI-based polyurethane insulation systems, including PIR boards, spray polyurethane foam (SPF), and cold chain applications. This expansion enhances Huntsman’s polyurethane capabilities in Asia-Pacific, supporting sustainable practices and energy efficiency. The facility plays a strategic role in meeting regional demand for differentiated solutions, aligning with Huntsman’s commitment to innovation, environmental stewardship, and market growth opportunities.
• In March 2024, BASF announced a price increase for select polyalcohols in North and South America, effective March 15, 2024, or as existing contracts allow. The price adjustments include Neopentylglycol (NEOL/NPG) with an increase of USD 0.09/lb (USD 198/mt), and 1,6 Hexanediol Flake, Molten (HDO), Polycaprolactone (Capromer), and Epsilon-Caprolactone (CLO), each with an increase of USD 0.10/lb (USD 220/mt).