Demand to grow 9.4% per annum through 2016
Demand for insulation materials in China is projected to grow 9.4 percent per year through 2016 to ¥65.7 billion. Continued increases in building construction and output in the manufacturing sector will drive advances. Further growth will 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 to post doubledigit gains through 2016
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 expand at 10 percent per year through 2016, supported by healthy growth in building construction. New multifamily 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 spur market gains for insulation materials. In addition, improvement and replacement of insulation in existing housing in order to raise energy efficiency, as well as to enhance comfort, will continue to further market gains.
Demand for insulation in the industrial and HVAC equipment market will trail overall growth through 2016, although strong gains 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 manufacturers and the government -- will also spur demand gains in this market. Demand in other key markets will be driven by rapidly expanding output of insulation-containing appliances and transportation equipment.
Foamed plastics to remain leading material by value
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 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.
Northwest, Southwest regions to see fastest gains
Regional demand for insulation materials varies substantially due to differences in demographics, economic activity, and climate. With 29 percent of China’s population and 37 percent of the country’s GDP in 2011, the Central-East is the largest regional market for insulation materials with 45 percent of national demand. The Northwest and Southwest will post the fastest growth in insulation demand through 2016, each advancing at 10 percent annually.
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