PU resin for synthetic leather is generally a collective term for polyurethane resins used in coating and production of synthetic leather. PU leather is widely used in industries such as clothing, footwear, luggage, furniture, and sports equipment. In 2023, the operating rate of PU resin for synthetic leather in China reached 47%, indicating ample capacity reserves in the industry, according to PUdaily.

Most synthetic leather resin manufacturers are based in the central and southern regions of China, as well as in proximity to downstream industrial clusters, such as footwear and clothing industry bases, Fujian and Zhejiang, which account for a considerable share nationwide. Eco-friendly production and the development of high-end new products will become new directions for Chinese manufacturers. With the strengthening of national environmental regulations, some small and medium-sized manufacturers have been relocating from large cities to places such as Taizhou, Fuding, and Cangnan.

Chinese PU resin for synthetic leather industry has faced multiple challenges in recent years, as it continuously moves towards industrialization. For small and medium-sized manufacturers, reasonable control of costs and enhancing product quality to expand markets have become bottlenecks. Small ones are phased out, and their capacities are gradually acquired by top ones. Large-sized manufacturers are seizing increasingly larger market shares, while small and medium-sized ones are gradually decreasing.

In 2023, the total capacity of Chinese top 8 synthetic leather resin manufacturers (with a capacity of over 100ktpa) was 1.91mtpa, with a cumulative market share of 62% (i.e., CR8 ratio is 62%). The total output of the top 6 manufacturers accounted for 70% of the total. It means that Chinese PU resin for synthetic leather industry operates in a high-concentration environment.

Chinese PU resin for synthetic leather industry has seen limited changes in total capacity in recent years, basically maintained at over 3mtpa. However, the annual consumption is only about 1 million tonnes, leading to an overcapacity in this industry. In 2023, China’s capacity of PU resin for synthetic leather was 3.08mtpa, basically unchanged from the previous year. Compared to 3.13mtpa in 2021, the capacity slightly decreased. The output in 2023 was 1.45 million tonnes, a decrease of 4.6% year-on-year.

Due to the decrease in output of PU resin for synthetic leather, polyester polyols consumption has also decreased. Currently, most major synthetic leather resin manufacturers in China produce the raw material, polyester polyol, while also having facilities for related downstream products; generally, large-sized manufacturers sell a portion externally. The ratio of polyester polyol in polyester-based PU resin for synthetic leather is generally 15-18%. Excluding some polyether or CASE types, Chinese PU resin for synthetic leather industry consumed 236,000 tonnes of polyester polyols in 2023, a 4.5% decrease compared to the previous year.