The disorderly expansion of the polyurethane insulation industry expects ultimate policy regulation

2025/8/11 16:58:44

       Four years ago, the Shanghai "11•15" fire pushed the application of "polyurethane" as an insulation material in buildings to rock bottom. In just a few years, the polyurethane market has experienced roller-coaster-like twists and turns. Although policies and regulations still need to be further clarified, a large number of enterprises have flocked in—on the one hand, expecting further relaxation of policies; on the other hand, enduring the current situation of disorderly competition in the industry.　　

Expansion in Disorder　　

    "In terms of production equipment, more than 200 production lines were launched last year, and each line generally produces over 1 million square meters," said Zhu Changchun, Secretary-General of the China Polyurethane Industry Association, at the recently held "China Polyurethane External Wall Insulation Technology Seminar."　　

Disorderly Expansion of the Polyurethane Insulation Industry: Awaiting Ultimate Policy Regulation

       However, Zhu Changchun believes that it is not so much overcapacity in the industry as irregular competition. "A large number of low-grade, low-tech materials have impacted the market. Many enterprises resort to unscrupulous means to engage in low-price competition to reduce costs, while enterprises that truly invest in raw materials, technology, and capital struggle to sell their products."　

     "Some enterprises, without guarantees in raw materials or technology and knowing nothing about this industry, rush to buy equipment, and many of these devices end up just sitting there unused," Zhu Changchun told reporters.　

       Wei Hua, Deputy General Manager of Hongbaoli and General Manager of Nanjing Hongbaoli New Materials Co., Ltd., told reporters that the company currently has a production capacity of 7.5 million square meters for flame-retardant polyurethane insulation boards. The subsequent production line with another 7.5 million square meters is expected to be completed within the year, with sales revenue exceeding 60 million yuan in the past year. However, judging from the currently completed production capacity, the utilization rate is not ideal. Due to the still ongoing construction period, the company has been in a state of loss over the past three years.　　

     "The project has actually invested 160 million yuan by last year, and will reach 200 million yuan by the end of this year. Full-load production will require 400 million yuan in funds. Each of our boards meets standards, and the price is indeed slightly higher than that of the industry. However, as the two production lines reach scale and full capacity, costs will drop significantly," Wei Hua believes that enterprises focusing on quality and innovation, to develop better, most need policy space to be opened up.　　

       Hongbaoli stated in a recent investor event that the two new national standards were released relatively late last year. Previously, the building insulation market was quite chaotic, flooded with low-end products, which had a certain impact on the industry. Meanwhile, the inadequate implementation and supervision of national policies have led to the slow promotion of polyurethane insulation boards.　　

       Even so, many enterprises still choose to expand their production capacity.　

      Tang Zhiyong, Deputy General Manager of Shanghai Huafeng Puen Polyurethane Co., Ltd., told reporters that the company is currently considering building a branch factory to expand production capacity. It is currently the world's largest manufacturer of modified PIR polyurethane insulation materials.　

      In fact, these enterprises' expansion against the trend is more about pinning hopes on the full liberalization of policies.　

      Previously, data suggested that in the next 3-5 years, the proportion of polyurethane in the external wall insulation material market is expected to grow from less than 10% currently to 30%-40%.　　

      Zhu Changchun also stated that the application of polyurethane insulation materials is actually expanding year by year. In places such as Beijing, Jinzhou, and Xinjiang, local policies favor polyurethane. According to the development experience of Western developed countries like those in Europe, the application proportion in many countries reaches 50%. "In contrast, in China's northeast region, where temperature differences are large, buildings are required to achieve a 75% energy-saving rate. Under such standards, polyurethane is bound to be the dominant material."　　

Awaiting "Ultimate" Regulation　　

       In 2009, the Ministry of Public Security and the Ministry of Housing and Urban-Rural Development issued the "Interim Provisions on Fire Prevention for External Thermal Insulation Systems and External Wall Decoration of Civil Buildings" (Document No. 46), regulating the fire prevention design, construction, and use of external thermal insulation systems and external wall decoration of civil buildings.　　

       In 2010, after the Shanghai "11•15" fire, investigations revealed that the cause of the fire was precisely polyurethane used as an insulation material.

       In March 2011, the Ministry of Public Security issued the "Notice on Further Clarifying Relevant Requirements for Fire Supervision and Management of External Thermal Insulation Materials for Civil Buildings" (Document No. 65), proposing that for ongoing projects that have been approved, if flammable or combustible materials are used for external thermal insulation, relevant government departments should be urged to supervise the construction unit to remove such flammable or combustible insulation materials; for approved but unstarted construction projects using flammable or combustible materials for external thermal insulation, the construction unit should be urged to modify the design, select non-combustible materials, and re-submit for approval.　

       In fact, Document No. 65 was equivalent to "kicking out" polyurethane from the external insulation material market. However, at the end of 2012, the Ministry of Public Security issued Document No. 350, canceling the previous Document No. 65, which was regarded as "vindicating" polyurethane.

  　"Policies have gone in a circle, and currently, the valid one is Document No. 46 issued by the two ministries in 2009," said Li Jianbo, Deputy Secretary-General of the China Polyurethane Industry Association, to reporters.

　  "The process has gone in a cycle, leading to differences in policy implementation across regions. National policies are interpreted inconsistently at the local level—some have canceled them, some are still enforcing them. Policies are indeed chaotic," Li Jianbo said. In fact, this is also one of the reasons for the disorderly competition in the polyurethane board industry mentioned above.

　  "Document No. 65 caused chaos in the insulation market. Many enterprises, misled by the government, invested heavily in inorganic material production lines. With policies returning to rationality, their operating conditions are unsatisfactory," an industry insider said.

　　 After Document No. 65 was issued in 2011, many enterprises believed that phenolic materials had good fire resistance and rushed to launch production equipment. However, after the Ministry of Public Security issued Document No. 350 in 2012 to "vindicate" polyurethane, many enterprises followed the policy direction and switched to producing polyurethane boards.

　　But even after being liberalized, policies and regulations for the polyurethane board industry still need further clarification.

　 "In the future, Document No. 46 will be replaced by the Code for Fire Protection Design of Buildings (GB50016). This document is still under consultation between the two ministries," Li Jianbo told reporters. GB50016 has been in the works since 2010, and currently, all parts except for wall insulation (on which no agreement has been reached) have basically been finalized.

　 "The draft for review has been submitted three times, which is quite unusual for a standard," the aforementioned industry insider told reporters.

　 "Standards and policies are formulated through administrative means rather than from a scientific and factual perspective, which brings unnecessary obstacles to the development of insulation materials and prevents our materials from being used in green buildings," Wei Hua told reporters. Fire protection and energy conservation are a contradiction in buildings. The administrative approach is to sacrifice energy conservation for fire protection. "But if it is safe, is there a need to raise standards further? It's like on an expressway—for safety, limiting the speed to 100 km/h is not enough, and then further limiting it to 80 km/h. Where is the transportation efficiency? Speed must be scientifically reasonable, and the same applies to fire protection requirements."

　　Li Jianbo believes that comparing the fire resistance of polyurethane with other building materials is like "pitting ceramic tiles, wood floors, and carpets against each other in fire resistance": with ceramic tiles and cement floors, you can throw a cigarette butt directly on the ground after smoking, but you wouldn't do that with wooden floors or carpets at home. "For organic insulation materials during construction, managing fire sources on the construction site is crucial. With inorganic materials, cigarette butts or welding sparks don't matter. Therefore, using these materials correctly is very important; we can't completely negate a material because of such characteristics."

　　Wei Hua emphasized that the development scale of the polyurethane industry depends on the policy space given to the industry. As long as there are scientific and reasonable policies, the spring of polyurethane will not be far away.