Expanded Polypropylene (EPP) Foam Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Market Overview

The expanded polypropylene (EPP) foam market is projected to register a CAGR of over 6% during the forecast period (2021-2026).

The market was negatively impacted due to COVID-19 in 2020. Owing to the pandemic scenario, several countries around the world went into lockdown to curb the spread of the virus. The supply and demand chain disruptions due to lockdowns being practiced had severe effects on the demand for expanded polypropylene (EPP) foam in various applications such as automotive, furniture, food packaging, and others. However, the condition is expected to recover in 2021, which may restore the growth trajectory of the market over the forecast period.

Over the medium term, the non-toxic and recyclable nature of the material and the rising demand from packaging industries may drive the market's growth.

On the flip side, higher prices among other structural foams and the negative impact of the COVID-19 pandemic are likely to act as restraints for the market studied.

The rising demand for bio-based polypropylene foam and its emergence as a replacement for other products are likely to act as opportunities in the future.

The Asia-Pacific region dominated the market, and it is expected to witness the highest CAGR over the forecast period.

Scope of the Report

The expanded polypropylene (EPP) foam market is segmented by raw material, form, application, and geography. By raw material, the market is segmented into synthetic polypropylene and bio-based polypropylene. By form, the market is segmented into fabricated EPP, molded EPP, and other forms. By application, the market is segmented into automotive, dunnage, furniture, food packaging, HVAC, sports and leisure, and other applications. The report offers the market sizes and forecasts for 16 countries across the major regions. For each segment, market sizing and forecasts have been done on the basis of revenue (USD million).

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Key Market Trends

Increasing Demand from the Automotive Industry

The automotive sector is currently the largest consumer of EPP foams. The demand for EPP foams has increased over the years, as the EU regulations pertaining to emissions have become more rigorous and the laws on recycling of vehicles withdrawn from use have been introduced.

The increasing usage of EPP foams in seating and other automotive components reduced the vehicle’s overall weight by ~10%, and the fuel consumption reduced by ~7%. The share of recyclable materials in vehicles that can be reused is increasing simultaneously. In addition, increasing electric cars promote the EPP foam market’s growth, as EPP foams play a significant role in making electric cars lightweight and thermally insulated, enhancing the energy absorption capabilities. EPP foams are also used in the manufacturing of door pads, headliners, and mats. They make it possible to maintain a constant air temperature in the cockpit and generate ideal conditions for battery operations. Excellent recoverability and the ability to absorb impact energy increase the usage of EPP foams in bumpers. In a collision, molded EPP parts built into bumper bar systems reduce the pressure and minimize the amount of impact energy transmitted to the chassis.

Despite an encouraging term of growth in the automotive sector during the past decade, the momentum slowed down in recent years. The sales and production of new vehicles are going down in various parts of the world, including Europe, Asia-Pacific, and the United States. This affected the previously growing automotive production in most nations. Business models, markets, and the competitive landscape are undergoing changes.​​ This is slowing down the demand for EPP foams.

According to the OICA data, global automotive production declined by around 5% and reached 91.78 million in 2019. ​The car sales declined by more than 3 million in 2019. In the first six months of 2020, automobile production witnessed a huge downfall across the globe due to the impact of COVID-19. According to OICA, in 2020, the global automotive production was about 17,860 thousand units in the first quarter, 31,133 thousand units in the second quarter, and 52,009 thousand units in the third quarter, declining by about 23.1%, 32.4%, and 22.9%, respectively, from the previous year at the same time.

However, with growing concerns related to environmental pollution from petrol- and diesel-based vehicles, the production of electric vehicles is expected to pick up pace over the next five years. This is likely to drive the demand for EPP foams over the forecast period.

According to IEA, in 2030, global electric vehicle sales are expected to reach 125 million as per the New Policies Scenario (excluding two/three-wheelers). In the [email protected] Scenario, in 2030, around 70% of the vehicle sales in China are expected to be EVs. Also, half of the vehicles sold in Europe are EVs, along with 37% in Japan, 30% in Canada and the United States, and 29% in India.

Hence, such growing demand for electric vehicles in recent years and the upcoming consumer shift to electric vehicles are likely to create an opportunity for EPP foams during the forecast period.

All the aforementioned factors are expected to affect the usage of expanded polypropylene (EPP) foams in automotive applications.

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