Consumption of Insulation Materials in China to Grow Over 8 Percent Annually

Consumption of insulation materials in China is expected to grow 8.2 percent per annum through 2013 to 35.7 billion yuan.  Advances will be driven by favorable growth in building construction expenditures and expanding manufacturing activity.  Efforts to improve energy efficiency in manufacturing processes, as well as in climate control related to heating and air conditioning systems, will also contribute to insulation demand. These and other trends, including market share and product segmentation, are presented in Insulation in China, a new study from the Beijing office of The Freedonia Group, Inc., a Cleveland-based industry research firm.

Foamed plastic is expected to continue to dominate the insulation market and post the fastest growth through 2013.  Foamed plastic generally offers higher R-values per meter than fiberglass, mineral wool, perlite and vermiculite.  The cost of producing foamed plastic insulation is also relatively inexpensive in China due to an abundance of the required resins.  Demand for fiberglass and mineral wool will also remain healthy as the Chinese economy continues to expand.

The fastest growth prospects will exist in nonresidential building construction.  Insulation materials used in nonresidential structures will benefit from strong fixed investment activity in office, commercial and institutional facilities.  Demand for insulation in the residential market will be driven by healthy new housing starts, especially multifamily structures.  Rising concerns about energy efficiency will also increase the intensity of use of insulation in buildings.  Consumption of insulation materials in the industrial and HVAC equipment market will be aided by the country’s ongoing industrialization and continued efforts to improve energy efficiency in manufacturing processes and in climate control of buildings.  The original equipment manufacturer (OEM) market for insulation will be boosted by growing production of major household appliances and motor vehicles.

China’s trade surplus in insulation reached 1.6 billion yuan in 2008.  Major export destinations include Southeast Asia, the Middle East and Eastern Europe.  Exports will be fueled by further growth in local production capacity and improving technological capabilities.  On the other hand, higher business income levels and revaluation of the yuan will help make foreign-made products more affordable, although above-average product prices will prevent imports from climbing at a faster rate.

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.