Asia-Pacific Cold Insulation Material Market size is forecast to reach $1,782.2 million by 2025, after growing at a CAGR of 7.9% during 2020-2025, owing to the rising usage of cold insulation materials in various end-use industries such as Chemicals, Building & Construction, HVAC, Oil & Gas, Refrigeration, and others in the Asia Pacific region. Cold insulation materials are the most cost-effective measure to combat climate change. Various stringent regulations have been imposed by the government in the Asia Pacific region to reduce the release of greenhouse gas emissions. And cold insulation materials have the ability to protect the environment from harmful greenhouse gases, which is the major factor driving the cold insulation material market growth in the Asia Pacific region during the forecast period.
By Material – Segment Analysis
The polyurethane foam segment held the largest share in the Asia Pacific cold insulation material market in 2019, owing to its extensive characteristics such as good thermal insulating properties, low moisture vapor permeability, high resistance to water absorption, relatively high mechanical strength, and low density. Polyurethane foam is effective as an insulator because it has a high proportion of unconnected closed microcells, filled with inert gas (minimum 90 percent). Also, it is relatively easy and economical to install. Thus, the superior characteristic of polyurethane foam over other materials is anticipated to boost the demand for polyurethane foam-based cold insulation in the Asia Pacific during the forecast period.
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By Application – Segment Analysis
The oil & gas sector held the largest share in the Asia Pacific cold insulation material market in 2019 and is growing at a CAGR of 6.2%, owing to the wide demand for cold insulation materials in the oil & gas industry. There is an increasing demand for cold insulation materials in the oil and gas industry for pipe work, pumps, manifolds, exhausts, and burners. The cold insulation materials used in the oil & gas industries are mainly for refineries, chemical, petrochemical, and natural gas extraction as these materials provide excellent insulation and reduce the risk of damage or corrosion. In the oil & gas sector, cold thermal insulation sheets are used to insulate storage tanks, where LNG is stored and in the liquefaction plant, where natural gas is converted into the liquid state. Thus, the extensive usage and wide application of cold insulation materials in the oil & gas industries is anticipated to drive the cold insulation materials market in the oil & gas sector during the forecast period.
By Country – Segment Analysis
China held the largest share in the Asia Pacific cold insulation material market in 2019 up to XX%, owing to the increasing demand for cold insulation materials in the region. The flourishing oil & gas, and building & construction industries are contributing to the heavy demand in the region. The high-quality and dependable cold insulation materials such as pipelines are required by the oil and gas industries to maintain the liquid state of liquefied natural gas (LNG) at a constant temperature of less than -163 °C. In 2018, China consumed 276.6 billion cubic meters of natural gas, an increase of 16.6% over 2017. According to International Trade Administration (ITA), the construction value of China in 2018 was USD 893.58, and the Chinese construction industry is forecasted to grow at an annual average of 5% in real terms between 2019 and 2023. The Green Building Action Plan also provides for the rehabilitation of some 400 million square meters of existing urban housing in northern China. Thus, with the increasing oil & gas and building & construction sectors in the region, the demand for cold insulation materials will also substantially increase, which is anticipated to drive the Asia Pacific cold insulation materials market during the forecast period.
Drivers – Asia-Pacific Cold Insulation Material Market
Increasing Building and Construction Activities
The building and construction activities are increasing in various Asia Pacific regions such as India, and China due to economic reforms and rising per capita income of the individuals. The population growth in Asia Pacific regions is resulting in the need for more residential and commercial sector buildings. In India, the government has initiated projects, such as ‘100 smart cities’ and ‘Housing for All by 2022,’ which are expected to drive the Indian residential construction market over the forecast period. According to the International Trade Administration (ITA), the Australian construction industry is valued at approximately AUD150 billion (USD112 billion) annually and accounts for around 9% of GDP. According to the Building and Construction Authority (BCA), Construction demand is expected to hold steady over the medium term. For 2021 and 2022, demand is projected to range between S$27 billion and S$34 billion per year, and S$28 billion and S$35 billion per year for 2023 and 2024. The cold insulation materials are being widely used in the building and construction details of floors, walls, and roofs/ceilings for new building constructions and for retrofitting existing buildings to maintain the required temperature inside the building. Thus, the increasing building and construction activities by the government in the Asia Pacific region acts as a driver for the cold insulation materials market during the forecast period.
Increasing Oil & Gas Industries
According to the Oxford Institute for Energy Studies, Japan operating on large scale Japanese-owned floating oil & gas projects such as Ichthys Liquefied Natural Gas (LNG) Project for the production of LNG, LPG, and condensates to increase their self-development ratio (SDR) of oil. According to the U.S Energy Information Administration, South Korean oil demand rose by more than 300,000 b/d between 2014 and 2017 as a result of greater use of liquefied petroleum gas (LPG) and naphtha in the petrochemical sector, and higher heavy fuel oil consumption in the power sector. To reduce South Korea’s dependence on foreign energy imports, the Ministry of Trade, Industry, and Energy (MOTIE) established self–sufficiency targets in oil and natural gas for South Korean energy companies, which will propel the oil and gas industry in South Korea. According to Australian Petroleum Production and Exploration Association (APPEA), the Australian oil and gas industry has invested over $300 billion in natural gas production, transport, liquefaction, and export facilities over the last decade. This investment returned Australia with export earnings of over $50 billion in 2018-19, double than that of in 2016-17 ($22.3 billion). Thus, with the increasing oil and gas industry, the demand for cold insulation materials will also increase in the Asia Pacific for cryogenic applications, which acts as a driver for the Asia Pacific cold insulation materials market during the forecast period.
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Challenges – Asia-Pacific Cold Insulation Material Market
Pricing Volatility of Raw Materials of Cold Insulation Materials
The surge in prices of raw materials used for the manufacturing of polyurethane foam such as succinic acid, toluene diisocyanate, polyols, combined with volatility in crude oil prices has hampered the overall growth of the polyurethane foam-based cold insulation material market. Adipic acid is a feedstock for polyester polyols used in the manufacturing of polyurethane foams insulation materials. And, the stock of adipic acid has tautened over the past few months. Thus, the pricing volatility of raw materials of cold insulation materials may restrain the Asia-Pacific cold insulation material market growth during the forecast period.
Covid-19 Impact on The Asia-Pacific Cold Insulation Material Market
The Covid-19 pandemic outbreak has impacted the imports and exports of various commodities in the Asia Pacific region. Governments of Asia-Pacific have imposed export restrictions which are significantly disrupting with the supplies of elastomers. In addition, the Asia-Pacific manufacturers are facing issues such as delays in receiving raw materials, which is further resulting in delayed shipments to the customer. Moreover, the quality of some raw materials has declined considerably and the shipments' orders are being heavily affected due to the non-availability of vessels and blank sailing. All these factors are limiting the growth of Asia-Pacific cold insulation material market growth.
Market Landscape
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the Asia-Pacific cold insulation material market. In 2019, the market of Asia Pacific cold insulation material has been consolidated by the top five players accounting for xx% of the share. Major players in the Asia Pacific cold insulation material market are BASF, Owens Corning, Rockwool International, Huntsman Corporation, Evonik Industries, Bayer Material Science, Fletcher Insulation Group, Armacell International Holding GmbH, Knauf Insulation, and Dow Chemical Company.
Key Takeaways
China dominates the Asia-Pacific cold insulation material market, owing to the increasing manufacturing & construction activities in the country due to various government initiatives such as China’s Five Year Plan.
The use of cold insulation has increased in recent years, owing to its ability to protect the environment from greenhouse gases and increase the efficiency of the system where it is installed.
The cold insulation material is a sealed structure used to prevent wicking in a system where it is installed by acting as a heat flow barrier. These are adopted in a wide range of applications to maintain a low temperature for process control, avoid condensation of the surface, and preserve cooling.
Expanded Polystyrene (EPS) insulation systems are designed specifically for use in cold and chilled service pipe insulation systems and compare very favorably against other insulation systems and in particular offer the highest ratio of thermal resistance (R-value) per unit cost.
Due to the COVID-19 Pandemic, most of the Asia Pacific countries have gone under lockdown, due to which operations of various industries in the region such as oil & gas and building & construction has been negatively affected, which is hampering the cold insulation materials market growth in the Asia Pacific region.
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