Global Insulation

Report Overview

Featuring 390 tables and 107 figures

Why is India forecast to post 7% growth?

• Industrialization 

• Rising Incomes

Through 2028, global demand for insulation is forecast to rise 4.0% per year to $72.5 billion, totaling 30.5 million metric tons. Market value growth will be primarily driven by volume demand gains, with further increases restrained by a normalization in price growth following the unsustainable surges that occurred during the latter part of the 2018-2023 period.

Volume demand is expected to grow 2.9% annually to 30.5 million metric tons, supported by:

• strong growth in nonresidential building construction in the Asia/Pacific and Africa/Mideast regions, coupled with accelerating residential building construction globally

• efforts, including the installation of insulation, to improve the energy efficiency of all types of buildings

• rising production of HVAC equipment, industrial equipment, and appliances, particularly refrigerators and freezers

Industrial & OEM Markets to Offer Solid Gains

Through 2028, the industrial and OEM insulation markets – consisting of industrial and plant equipment, HVAC, appliances, and transportation equipment – are expected to advance at stronger paces than the building construction markets. Automotive, aerospace, and refrigerator and freezer applications will be significant drivers of growth, while the higher volume HVAC and industrial equipment segments will offer solid advances in absolute terms. Growth in these markets continues to be driven by industrialization in the Africa/Mideast and Asia/Pacific regions, as well as high disposable incomes in the US and Western Europe.

Industrialization & Rising Incomes Support Rapid Demand Growth in India

With anticipated annual growth of nearly 7% in value and 6% in volume, India will be the fastest growing major national market in the global insulation industry. Since India is the most populous country in the world and has a rapidly advancing manufacturing sector, demand for insulation has increased significantly over the past decade and will continue to do so going forward:

• Rapid increases in incomes and the continued urbanization of the country’s population have spurred demand for higher quality homes that feature better construction techniques, including the use of insulation to better regulate interior temperatures.

• Continued industrialization has created a massive production base that is still expanding, with rising output of products such as refrigerators and freezers that can meet not only domestic demand, but also that of regional neighbors.

• Supporting this growing production base will be significant increases in foreign investment, spurring the construction of factories and other commercial buildings.

Historical Market Trends

In any given year, global demand for insulation is impacted by a number of factors including:

• levels of residential and nonresidential building construction spending

• the types of buildings being built, as single-family houses have considerably more insulation than a multifamily unit and the amount of insulation per office and institutional building is substantially higher than manufacturing facilities and warehouses

• government efforts to improve housing quality or meet current shortages

• changes to building codes

• energy efficiency regulations

• construction or repair of infrastructure

• appliance, HVAC equipment, industrial equipment, automobile, shipbuilding, and aerospace production

Given the importance and widespread use of these products across several industries, insulation demand volume does not experience high levels of volatility, even during times of economic crisis. Year-to-year volatility in market value is more significant because of fluctuations in chemical prices for foamed plastic insulation, as well as currency effects relative to the US dollar. Additionally, supply chain issues and an inflationary environment caused prices for all insulation materials to spike in 2021 and 2022.

International Trade

In general, international trade in insulation materials is fairly limited as transportation costs are high for this bulky and relatively low-value product, and production facilities exist throughout the world. In addition, it is logistically preferable to ship insulation from the factory or warehouse to the construction site as quickly as possible. Neighboring countries do trade, but usually only for products that cannot be manufactured locally.

For these reasons, companies are more likely to become involved in foreign insulation industries by investing in production subsidiaries. Many leading insulation producers compete in foreign markets via subsidiaries or joint ventures with production plants. Knauf (Germany), for instance, operates insulation plants throughout Europe and in the US. Similarly, ROCKWOOL (Denmark) makes insulation at sites in multiple Asian and European countries, as well as in the US.

Most insulation producers have production capacity outside of their home countries, so exports from the traditional insulation production centers – North America, Western Europe, and Japan – have not increased significantly since 2013. Insulation is being utilized more intensively in building construction worldwide, and local insulation production capacity will necessarily need to expand; developing nations will do so rapidly. Consequently, the trade surpluses in many developed nations are expected to stagnate or decline.

Demand by Material

Many different materials can be used as thermal and acoustic insulation, and each possesses specific characteristics that determine its appropriateness for the job at hand, including:

• ease of installation

• expected lifespan

• moisture, mold, and infestation resistance

• energy efficiency

• structural stability

• cost

The growth outlook for the different types of materials varies, but most will see gains (despite decelerations in average prices) because volumes are expected to increase, negating the drop in prices:

• Foamed plastic insulation is expected to see the greatest absolute gains – accounting for 48% of global value in 2028 – supported by rapidly expanding nonresidential markets in developing areas of the Asia/Pacific region, where foamed plastic is used intensively in nonresidential buildings.

• Demand for mineral wool continues to be aided by increasingly stringent fire safety codes worldwide, as mineral wool insulation offers superior fire resistance.

• Fiberglass insulation demand will be supported by the rising number of new single-family housing units and use of fiberglass batts and blankets in attics and ceilings to help improve energy efficiency in these structures.

• Other insulation materials collectively accounted for only 8% of value demand in 2023. Many faster growing, higher-value renewable and environmentally friendly materials are included in this segment, helping boost demand value. However, inexpensive cellulose and reflective insulation dominate by volume.

Demand by Market

Market Value

The major market segments analyzed in this study are:

• residential buildings

• nonresidential buildings

• industrial and plant equipment

• HVAC equipment

• appliances

• transportation equipment

Market value growth will result primarily from volume demand gains due to expected increases in building construction and manufacturing throughout most of the world. Market value will also benefit from increased market penetration of higher value insulation products, although slower price increases than those of the previous historical period will limit further gains.

Building construction will continue to drive growth in the global insulation market, accounting for 66% of demand value in 2028.

The nonresidential building market accounts for the largest share of demand value, while the residential building market leads in terms of thermal value. This discrepancy is attributable to the widespread use of expensive foamed plastics in the nonresidential market, while less expensive materials are more commonly utilized in residential buildings.

Pricing Trends

A number of factors influence year-to-year fluctuations in insulation prices, including:

• raw material prices

• supply chain disruptions

• material surpluses or shortages

• short-term economic shocks, such as the global financial crisis and the global COVID-19 pandemic

The latter part of the 2018-2023 period saw significant price volatility:

• 2021 and 2022 brought about unprecedented price increases in the insulation industry, precipitated by inflation, supply chain issues, and surging transportation costs (due to higher oil prices throughout the world); all of factors equated to raw material prices increasing at double-digit paces in both years.

• Foamed plastic insulation products were especially hard hit. Beginning in early 2021, a surge in polystyrene prices was caused by US and Canadian government regulations aimed at eliminating the use of HFC-134a in XPS blowing agents. In addition, pandemic-related closures of some of the world’s largest polystyrene manufacturing plants constricted supply and gave rise to above average price inflation for this product. Prices for this product are expected to remain elevated in the short term.

• Although prices for fiberglass and mineral wool increased once again in 2023, a drop in prices for foamed plastic were significant enough to cause an overall market decline in average prices and market value.

Average insulation prices are expected to increase at an average annual rate of 1.0% to $2.37 per kilogram in 2028:

• In the near term, prices for fiberglass and mineral wool will experience a moderation before returning to growth, albeit at a more sustainable level than that which occurred during the latter part of the 2018-2023 period.

• Foamed plastic insulation will grow at rates more in line with the historical average during the forecast period.

Nevertheless, prices for all three insulation materials will remain well above pre-pandemic levels.

Report Details

This study analyzes global supply of and demand for insulation. Historical data (2013, 2018, and 2023) and forecasts for 2028 and 2033 are provided for insulation demand by material (in dollars and metric tons) and market (in dollars and square meters R-1), net exports (in dollars), and production (in dollars) on a country-by-country basis. Annual data for 2020 to 2027 is also presented. Demand in value terms is shown at the manufacturers’ level and excludes distributor and retailer markups.

Materials broken out include:

• foamed plastic

  • expanded polystyrene, including graphite polystyrene

  • polyurethane and polyisocyanurate (e.g., rigid board and spray)

  • extruded polystyrene

  • other foamed plastics (e.g., elastomeric, phenolic, polyolefin, melamine)

• fiberglass (including batts, blankets, loose fill, roof deck, board, and pipe and duct wrap)

• mineral wool (including batts, blankets, board, and loose fill)

• other materials (e.g., aerogels, cellulose, reflective insulation, radiant barriers, perlite, vermiculite, and all other insulation materials)

Granulated mineral wool used in ceiling tiles is not included in the scope of this study.

The major market segments analyzed are:

• residential buildings (e.g., single-family, including manufactured homes, and multifamily)

• nonresidential buildings (including, office, retail and lodging, institutional, and industrial buildings)

• industrial and plant equipment (e.g., power generation, oil and gas, petroleum refining, chemicals, food and beverages, pharmaceuticals)

• HVAC/air distribution equipment (including residential, commercial, and heating and air ducts)

• appliances (e.g., refrigerators, freezers, ovens, dishwashers, clothes washers and dryers)

• transportation equipment:

  • motor vehicles (cabins, engines)

  • aerospace equipment (fuselages, air ducts)

  • ships and boats (hulls, cabins)

  • railroad equipment (railcars, insulated cars)

• other insulation markets, including nonbuilding construction, packaging, furniture, bedding, clothing, and off-road equipment

Both thermal and acoustic insulation are included in the scope of this study.

The metric measures of thermal value used in this study cannot be converted to English units (those used in the Freedonia Group’s US insulation studies) simply by converting square meters to square feet. The metric version of thermal value defines heat transfer in metric units (watts) and is based on a material sample one meter thick; the English version of thermal value defines heat transfer in British thermal units and is based on a material sample one inch thick.

Taking into account all of the differences in measurement, approximately 16.4 square meters of R-1 value (metric system) is equal to 1,000 square feet of R-1 value (English system).