Over the past few years, China's real estate market has remained the hardest variable to avoid when discussing polyurethane demand in construction-related applications.
According to the National Bureau of Statistics, China's floor space of new housing starts reached 739 million square meters in 2024, down 23.0% year on year, while completed floor space reached 737 million square meters, down 27.7%. Entering 2026, the real estate side has yet to show a clear recovery. In January-April 2026, national real estate development investment fell 13.7% year on year, floor space of new starts dropped 22.0%, and completed floor space declined 24.0%.
For the polyurethane industry, this means the traditional new-build cycle is still providing limited pull for building insulation, spray foam, panels, sealants and pipe insulation. The old transmission chain of "real estate new starts - building materials - PMDI demand" is unlikely to return quickly to a high-growth phase.
But the question is also changing. A weaker incremental real estate cycle does not mean construction-related demand disappears. It is shifting from "new construction expansion" toward "stock renewal."
China's newly released Urban Renewal Plan for the 15th Five-Year Plan period proposes that, over the next five years, around 115,000 old urban residential communities will start renovation, around 500,000 dilapidated urban homes or rooms will be renovated, around 4,000 urban villages will be upgraded, and around 365,000 kilometers of urban underground pipelines will be renovated. A policy briefing on June 8 further noted that during the 15th Five-Year Plan period, China will continue to build and renovate about 770,000 kilometers of urban underground pipelines, covering gas, drainage, water supply, sewage and heating networks.
The significance for polyurethane is not that the policy directly names polyurethane. Rather, it opens a group of material-intensive scenarios: existing-building energy retrofits, roof and external-wall insulation, heating pipeline insulation, underground utility corridors, cold-chain storage, public building renovation, and upgrades to community commercial and public-service facilities.
From the perspective of MDI consumption structure, this logic has a solid base.
According to PUdaily statistics, China's apparent MDI consumption reached 3.716 million tonnes in 2025, up 10.9% year on year, while actual MDI consumption reached 3.615 million tonnes, up 6.8%. Apparent PMDI consumption reached 2.213 million tonnes, up 15.3%. On a downstream actual consumption basis, China's PMDI consumption reached 1.995 million tonnes in 2025, up 4.3%; rigid foam consumed 1.410 million tonnes, accounting for 70.7% of PMDI consumption.
In other words, rigid foam remains one of the core demand directions for PMDI.
Looking further into rigid-foam-related applications, China's PMDI consumption in home appliances reached 705 kt in 2025, accounting for 35.3%; construction and building materials consumed 726 kt, accounting for 36.4%; and transportation consumed 171 kt, accounting for 8.6%. Construction and building materials remain one of the largest application blocks, although demand was largely flat year on year. This suggests that the construction side has not lost scale; it has mainly lost growth momentum.