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The urea resin market is expected to grow at a compound annual growth rate (CAGR) of 4.12% during the forecast period.
The urea resin market is the main component of the amino resin technology. It is used for resilient stability, high strength, cost-effectiveness, versatility, etc. These resins have various applications, such as wood composites, wet-laid fiberglass mats, air filtration, coated and bonded abrasives, plywood, medium-density fiberboard, etc.
The major driving factor for urea resin would be expanding the building and construction industry in major parts of the world. This industry has large-scale applications for medium-density fiberboard, particleboard, etc. The growing economies of Asia and Africa, and the demand for affordable housing in the developed countries would increase the supply of urea resin for the manufacturing of wooden material for housing construction materials. Further, the growth of the automotive industry would increase the demand for urea resin as automotive parts manufacturing requires urea resin.
Urea-formaldehyde resin is used in fiberboard production. Fiberboard can be produced with sustainable and environmentally friendly materials. Different new technologies are applied for the production of medium-density fiberboard. For example, in August 2023, Greenply Industries Limited produced the first fibers with its new high-performance pressurized refining system from ANDRITZ at its MDF (medium-density fiberboard) production facility in Vadodara, Gujarat, India. This is an energy-saving and environment-friendly production process.
Further, in July 2023, Anlagentechnik GmbH, a German company, and DIEFFENBACHER, a leading manufacturer of press systems and complete production plants for the wood-based panels industry, collaborated with the Egyptian EPC contractor to supply an eco-friendly plant for the manufacture of high and medium-density fiberboard (HDF/MDF) from date palm fronds to Egypt's National Service Projects Organization (NSPO). These developments imply the demand for medium-density fiberboard and the relative application of urea resin in the production process.
Urea-formaldehyde resin is used in the manufacturing of particle boards. Particle boards are applied in manufacturing cabinets, dressers, tabletops, wardrobes, bookshelves, shoe racks, and beds. These are used in flooring, ceilings, walls, roofs, countertops, door cores, shelving, stair treads, store fixtures, prefabricated housing, freight cars, and ships. The need for particle boards is increasing with the enlarging building and construction market.
Moreover, in May 2024, Kronospan announced the acquisition of Woodgrain's particleboard facility. Kronospan is a leading producer of wood panel products. In June 2024, the company produced particleboard using 100% recycled wood. This showcased significant manufacturing capabilities, environmental responsibility, and resource optimization. This development indicates the growing need for particle board materials and urea resin to manufacture these goods.
As the world is growing, it is urbanized, and sustainable development depends upon the growing infrastructure and construction activities that are sustainable. The industry's growth would not only increase employability in the manufacturing industry but also the overall demand for raw materials in the sector, including wooden materials. The demand for urea resin will rise in the coming time due to construction sector demand.
The booming population growth is estimated by the United Nations to reach 8.5 billion by 2030 and 9.7 billion by 2050. These factors along with the growing migration crisis and urbanization led to the increase in demand for more construction projects and materials. The application of the urea resin would likely expand with demand for particle board, wood adhesives, plywood, and medium-density fiberboard in the market.
Urea Resin Market Geographical Outlook
The Asia-Pacific region is dominated by major economies like China, Japan, India, and South Korea. Some of the fastest-growing emerging economies, such as ASEAN countries, are from this region. India and China are the region's major growing economies.
The Indian furniture market is anticipated to be Rs. 1.20 lakh crore (US$14.41 billion) by FY28. India is the world's second-largest producer of lumber and the sixth-largest producer of natural rubber. The trend suggests that people prefer modern, useful, and versatile modular designs for furniture. The consumption of particle boards, wood adhesives, plywood, etc., will increase in the forecast period.
Urea-formaldehyde resin is also used in fiberboard production, which is used in the automotive industry. According to OICA (International Organization of Motor Vehicle Manufacturers), China produced 30,160,966 automobiles in 2023, with a 12% growth from the previous year. This number is the highest compared to other major global players such as Japan, the United States, and Germany.
Urea Resin Market Segment Analysis
The automotive industry worldwide is showing significant growth due to several factors, such as the growing demand for electric vehicles, surging demand from the developing economies of Asia Pacific and Africa, and easy financial availability for purchase. According to the OICA (International Organization of Motor Vehicle Manufacturers), global automotive production increased from 2022 to 2023 by 10%, numbering 9,35,46,599 in 2023. The major producers were China, India, the USA, Mexico, Brazil, and Germany.
Further, the major market driver is from the building and construction industry. According to Eurostat, for newly built dwellings, the number of transactions increased in Slovenia by 46.9% and Ireland by 4.9%. For existing dwellings, it increased in Poland and Bulgaria. The increase in the number of dwellings in Europe is due to the increased migration crisis and rising prices of housing, the region is developing new cheaper homes for the settlement.