XPS Price Inflation Will Boost Strong Rebounds for EXPS Insulation from 2020 Declines

Following declines in most markets in 2020, particularly building construction, the global insulation market will rebound strongly in 2021 and maintain a solid pace of recovery through 2025, finds a new Freedonia Group analysis. Rebounds in the global construction and manufacturing markets as they return to pre-pandemic levels will be a main source of growth, especially as polystyrene insulation is among the most commonly used insulation products in the world.

In addition to growth in real demand, the market will benefit from particularly strong value gains in 2021. A surge in polystyrene prices caused by government regulations aimed to eliminate the use of HFC-134a in XPS blowing agents in the US and Canada, as well as pandemic-related closures of some of the world’s largest polystyrene manufacturing plants, have constricted supply and given rise to above average price inflation.

Global Insulation Market to Grow 6.1% Annually Through 2025

Global demand for insulation is forecast to rise 6.1% per year to $56.9 billion in 2025, when sales in volume terms will total 28.0 million metric tons. Gains will be driven by:

• a global rebound in construction activity from the low levels experienced in 2020 due to the COVID-19 pandemic
• advances in nonresidential building construction, particularly in the Asia/Pacific region
• increasingly stringent energy efficiency and fire safety policies throughout the world, which often call for greater use of insulation in buildings
• strong rebounds in transportation equipment production following 2020 declines
• solid increases in HVAC and industrial equipment manufacturing activity
• rising production of appliances, particularly refrigerators and freezers
• a growing market for sustainable products produced from recycled materials

However, below average building construction outlooks in the US and Japan, as well as continued declines in single-family housing construction in China, will provide a check on even faster gains.

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Global Insulation analyzes global supply of and demand for insulation (including thermal and acoustic). Historical data (2010, 2015, and 2020) and forecasts for 2025 and 2030 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.

Materials broken out include:

• foamed plastic
• fiberglass
• mineral wool (granulated mineral wool used in ceiling tiles is excluded)
• other materials (e.g., aerogels, cellulose, reflective insulation, radiant barriers, perlite, vermiculite, and all other insulation materials)

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 (e.g., motor vehicles, aerospace equipment, ships and boats, railroad equipment)
• other insulation markets, including nonbuilding construction, packaging, furniture, bedding, clothing, and off-road equipment