China’s Insulation Demand to Grow 9% per Year
Demand for insulation materials in China is projected to grow 9.4% per year through 2016 to 65.7 billion yuan (~ $10 billion). Continued increases in building construction and output in the manufacturing sector are expected to drive gains, according to a new study from the Beijing office of The Freedonia Group Inc. Further growth will reportedly be spurred by changes in building codes to reduce energy consumption in building applications, as well as efforts to reduce energy use in manufacturing processes.
Building construction markets will continue to account for more than two-fifths of China’s total insulation demand. The residential and nonresidential segments will each reportedly expand at 10% per year through 2016, supported by healthy growth in building construction. New multi-family housing starts, driven in large part by China’s continuing urbanization, and strong fixed investment activity in office, commercial, institutional, and other highly insulated structures such as power and petrochemical plants, will boost market gains for insulation materials. In addition, the improvement and replacement of insulation in existing housing in order to raise energy efficiency, as well as to enhance comfort, will continue to promote market gains.
Demand for insulation in the industrial and HVAC equipment market is expected to rise 8.4% per year through 2016, trailing overall growth. Strong increases in investment in industrial and HVAC equipment as a result of continued industrialization in China will boost demand. Efforts to reduce energy consumption and costs in these applications—by both producers and the government—will likely also spur demand gains in this market. Demand in other important markets will be driven by rapidly expanding output of insulation-containing appliances (e.g., refrigerators and freezers) and transportation equipment.
In value terms, foamed plastics will continue to dominate the Chinese insulation market, accounting for more than four-fifths of demand in 2016. Foamed plastics’ high insulating value, moisture resistance, and ease of installation will reportedly continue to support demand gains going forward. However, demand for fiberglass and mineral wool will post faster growth through the forecast period, benefiting from their better fire retardance than that of foamed plastics.
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