Extruded Polystyrene Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Extruded Polystyrene Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The extruded polystyrene market is projected to register a CAGR of over 4% during the forecast period (2021-2026).

The market was negatively affected due to COVID-19 in 2020. Owing to the outbreak of COVID-19, many projects were halted in 2020 because of a lack of funds, labor shortage, and lockdown regulations. In many developed and developing countries such as the United States, China, and India, migrant workers wreaked havoc and stopped working in construction sites due to a ban on interstate travel. This causes disruption in the supply chain leading to less consumption of construction materials and decreased demand and supply of extruded polystyrene. For instance, in India, more than 30% of construction workers were away from construction sites due to the pandemic, thus, delaying the construction activities. Over 65% of companies in the construction ecosystem have been severely affected by the prolonged construction inactivity, thus, having a negative impact on the extruded polystyrene market. However, the construction industry is likely to witness growth in the coming years, owing to the activities in the economies such as China and India, thus, increasing the market for extruded polystyrene in the construction industry.

Key Highlights

• Over the medium term, the major factors driving the market studied are growth in construction and building activities around the world and an increase in demand for insulation materials.
• On the flip side, the high cost of extruded polystyrene on comparing to its close substitutes and the negative impact of the COVID-19 pandemic are expected to hinder the growth of the market.
• The growing concern regarding global warming and increasing demand for sustainable solutions like the introduction of green buildings is expected to offer various opportunities for the growth of the market over the forecast period.
• By application, the residential segment is expected to dominate the market owing to the increasing expenditure on construction of new buildings due to the growing population and increased renovation of buildings along with the adoption of the concept of green buildings.
• The Asia-Pacific region dominated the market across the world, with the largest consumption from countries such as China, India, and Japan.

Key Market TrendsIncreasing Demand from the Residential Segment

• Extruded polystyrene (XPS) is a thermoplastic polymer that has a closed-cell structure and is considerably stronger with higher mechanical performance but is more expensive than its close substitute expanded polystyrene (EPS).
• Extruded polystyrene is widely used in residential buildings in the form of rigid foam for the insulation of floors, roofs, walls, ceilings, and balconies owing to its properties, namely, high compressive strength and moisture resistance.
• Furthermore, extruded polystyrene is most widely used in the insulation of green buildings owing to its ability to reduce energy consumption by 6-8% and also the ability to reduce greenhouse gas emissions, namely, carbon dioxide and methane.
• The global residential building construction industry is projected to register a CAGR of over 10% during the forecast period. The demand for extruded polystyrene is expected to increase, which will propel the extruded polystyrene market.
• According to World Bank and Mordor Intelligence Analysis, the construction industry spending worldwide in the year 2019 was USD 12 trillion and is forecasted to reach an estimated value of USD 15.3 trillion in the year 2026, which will create the demand for building walls.
• The US Census Bureau has been providing more permits for the construction of new residential buildings due to the current trend of multi-family buildings, along with a rise in migration to cities.
• According to US Census Bureau, construction spending in the United States in both private and public construction in 2020 was around USD 1400 billion. Furthermore, according to StatCan, gross domestic product at basic prices for the construction industry in Canada in the year 2019 was around CAD 141.22 billion, and it is expected to increase during the forecast period.
• India is likely to witness an investment of around USD 1.3 trillion in housing over the next four years, during which the country is likely to witness the construction of 60 million new homes. The availability of affordable housing is expected to rise around 70% by 2024 in India.
• Owing to all the above-mentioned factors for extruded polystyrene, its demand from the residential segment is expected to grow rapidly over the forecast period.

Asia-Pacific Region to Dominate the Market

• The Asia-Pacific region is expected to dominate the market for extruded polystyrene during the forecast period. In countries, like China and India, owing to the growing population, increasing industrialization, urbanization, and living standards, the demand for extruded polystyrene has been increasing in the region.
• The Asia-Pacific region accounted for more than 40% of the global extruded polystyrene consumption share owing to growth in various sectors, namely, banking, telecommunication, information technology, financial services, and insurance.
• Governments of countries like India, China, and Japan have emphasized reducing greenhouse gas emissions because the adoption of green buildings is increasing in the region, and the demand for extruded polystyrene increases as it reduces the emission of harmful gases like carbon dioxide and methane.
• The Indian government allocated USD 63 billion for the infrastructure sector in 2019-20, and it is planning to spend USD 1.4 trillion over the next five years.
• In India, the construction industry in value terms is expected to record a CAGR of 15.7% to reach USD 738.5 billion by 2022.
• The construction sector of India has been growing at a higher rate owing to the increasing investments and increasing purchasing power of people. The government of India supports the higher growth of the construction sector through their schemes as: “Pradhan Mantri Awas Yojana (PMAY)” program aims to build 20 million urban homes and 30 million rural houses by 2022.
• The rising expenditure in infrastructure development is expected to propel the extruded polystyrene market. For instance, China is investing USD 1.43 trillion in the next five years till 2025 in major construction projects. According to the National Development and Reform Commission (NDRC), the Shanghai plan includes an investment of USD 38.7 billion in the next three years, whereas Guangzhou signed 16 new infrastructure projects with an investment of USD 8.09 billion.
• Also, China has the largest building market in the world, making up 20% of all construction investment globally. The country alone is expected to spend nearly USD 13 trillion on buildings by 2030.
• The aforementioned factors, coupled with government support, are contributing to the increasing demand for extruded polystyrene during the forecast period.

Competitive Landscape

The extruded polystyrene market is fragmented, with players accounting for a marginal share of the market. Some key companies in the market include BASF SE, Synthos, Saint-Gobain ISOVER, Knauf Insulation, and DuPont.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned
 
IKEA
Home Centre
Royal Furniture
Homes R Us
ID design
Luxe Living
Natuzzi
Al Huzaifa
Riyadh Furniture Industries
Delmon Interiors & Furniture Factory
Fahmy Furniture
AL Mutlaq
Ebarza
HomeBox
LifeInterios
PAN Emirates
Danube Home
Midas

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