In 2023, China’s polyether polyol capacity reached around 7.48mtpa and the output of polyether polyols totaled 4.7 million as suppliers scheduled production based on sales, according to Pudaily. The operating rate of polyether polyol averaged 62.8%. Despite intensifying market competition, some industry leaders are still actively expanding their polyether polyol capacity. This reflects the complex competitive landscape and ever-changing consumer demands.

The theory of comparative advantage argues that countries can benefit from trading with each other by focusing on making the things they are best at making, while buying the things they are not as good at making from other countries. This theory can also be applied to the polyether polyol industry, suggesting that producers should focus on producing products in which they have a comparative advantage, while eliminating or upgrading outdated production lines. With the continuous advancement of production technology and changes in market demand, Chinese polyether polyol industry is undergoing a round of reshuffle. This involves gradually replacing old and inefficient capacities with new, efficient and eco-friendly ones, thereby driving the industrial transformation and upgrading.

Excess capacity is a main challenge facing the Chinese polyether polyol sector today. But for individual producers, there is no such thing as excess capacity. Many producers cannot operate at full capacity due to technical issues or idle some facilities because of inadequate order intake. Therefore, for polyether polyol producers, improving technological capabilities, optimizing product structures, and expanding sales channels are key to addressing the issue of excess capacity.

Polyether polyol producers are actively seeking paths for transformation and upgrading amid intensifying market competition. They optimize supply chain, increase value-added products, and further expand the market scale of polyether polyol. The process of transformation and upgrading not only strengthens the competitiveness of producers but also enhance their brand image, consolidating their positions within the industry.

Although the growing capacity of polyether polyol has aggravated the competitions, it has also provided greater development space for some large and strong players. As global giants such as Dow, Covestro, SKC, and Shell accelerate their transformation of polyols business, Chinese leading polyether polyol producers, such as Wanhua Chemical, Longhua New Material, and Changhua Chemical Technology, regain market share. Through continuous technological innovation and market expansion, these producers have gradually established leading positions in the industry.

Furthermore, the issue of excess capacity presents an opportunity to transform and upgrade business. By enhancing technological capabilities, optimizing product structures, and expanding sales channels, producers can strengthen their competitiveness and achieve sustainable development. Therefore, for polyether polyol producers, only by constantly enhancing their own capabilities can they stand out in a sea of competitors.