Amidst lower demand downstream, uncertain prospects for the flexible foam industry in 2023

According to data collated by Europur, the total production of flexible polyurethane foam in geographical Europe (including Russia and Turkey) reached nearly 1.58Mt in 2022. Of this amount, ~226kt consisted of moulded foam, a decline of 10% compared with 2021, primarily attributed to reduced automotive production. The reported production of flexible PU slabstock foam is ~1.35 million tonnes, representing an 8.5% decrease compared with 2021. It is however important to note that, despite this significant decrease, the volumes seen in 2022 were slightly higher than those recorded in 2018, before the pandemic.

2021 was a wild ride for the industry, characterised by strongly increasing raw material prices as well as supply issues. It nevertheless ended being a record year for foam production overall. For its part, 2022 can be characterised as a game with four distinct quarters. Q1 of 2022 started with growth, hinting at continuation of the industry’s relatively good performance during the Covid-19 pandemic. However, growth gradually slowed in Q2, and eventually the industry experienced periods of stagnation and even a sharp decline towards the end of the year. The industry as a whole grappled with rising costs across all sectors: from energy prices, labour costs and especially chemical raw materials. Despite a drop in overall demand, the automotive sector showed signs of slight recovery after struggling with previous supply chain issues. 

Looking at slabstock foam, even if most regions witnessed a decrease in demand, regional disparities were apparent. Not surprisingly, Eurasia experienced the steepest decline, largely influenced by the ongoing war in Ukraine and reduction/stop of supply of chemicals from the rest of Europe to Russia. In the European Union, UK, Switzerland and Norway production decreased by 10.5%. The notable exception is Türkiye, the only region displaying increase of production – and a rather significant one, a bit over 8%. Most of this increase can be attributed to strong demand in the mattress sector – notably relocation of large orders – and to the opening of new foam plants. Production in Türkiye continues to increase in 2023, notably due to high demand for comfort goods for the victims of the earthquake that affected the country in February of this year. It is expected that in 2023 Türkiye will overtake Poland as the main producer of flexible polyurethane foam. 

Demand from the e-commerce sector, notably “bed in a box” mattresses, remained high in 2022, after years of strong growth and outstanding performance during the pandemic. This came as a surprise to many, as with the reopening of traditional brick-and-mortar outlets after the pandemic, one could have expected a decrease in this segment.

Low demand that characterised the end of 2022 persisted into Q1 of 2023. Indications for Q2 2023 show no signs of improvement, with many foam producers reporting lower sales compared with any month in 2022. Despite some signs of improvement in the automotive sector, a comprehensive recovery across the main markets for flexible PU foam seems unlikely and a further reduction in production in 2023 compared with 2022 can be expected.

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