Extruded Polystyrene Market Trends

Market Trends of Extruded Polystyrene Industry

Increasing Demand from the Residential Segment

• Extruded polystyrene (XPS) is widely utilized for insulating basement walls and foundations due to its closed-cell structure. This material effectively resists moisture, making it suitable for damp-prone areas. Using XPS for basement insulation minimizes heat loss and reduces mold risks, thereby enhancing the comfort of lower-level spaces.
• XPS is versatile and can be applied to both exterior and interior walls. It is commonly installed as a continuous insulation layer beneath siding on exterior walls, which improves thermal resistance and reduces thermal bridging—where heat escapes through studs—thereby enhancing energy efficiency.
• In roofing systems, XPS is employed on flat, sloped roofs positioned above the roof deck and under roofing membranes, particularly in low-slope designs. This insulation is crucial in colder regions, as it significantly reduces heat loss through the roof, addressing a significant source of heat escape in homes.
• In April 2024, Owens Corning announced the complete transition of its XPS insulation production to FOAMULAR NGX (Next Generation Extruded) across all its United States and Canada plants. This initiative reflects the company's commitment to reducing buildings' environmental footprint. By eliminating HFC 134a from its XPS products a year ahead of upcoming ecological regulations, Owens Corning demonstrates a proactive approach to industry adaptation in anticipation of 2025 regulations.
• These innovations, coupled with the growing emphasis on eco-friendly products in residential construction, are expected to drive increased demand for extruded polystyrene in the residential sector over the coming years.

Asia-Pacific Region to Dominate the Market

• The Asia-Pacific region is anticipated to lead the extruded polystyrene market during the forecast period. In countries such as China and India, the demand for extruded polystyrene is rising due to population growth, increasing industrialization, urbanization, and improving living standards.
• Governments in India, China, and Japan prioritize reducing greenhouse gas emissions, spurred by the growing adoption of green buildings in the region. This trend drives demand for extruded polystyrene, as it helps lower emissions of harmful gases such as carbon dioxide and methane.
• The demand for office space is also increasing due to the growth of technology, e-commerce, and banking sectors, leading to the construction of new regional offices. For instance, China is significantly expanding its cold storage facilities to enhance the supply chain for fresh agricultural products, with investments in cold storage projects reaching CNY 20.718 billion in the first half of 2024, reflecting an 11.39% increase from the previous year, according to the Cold Chain Logistics Committee of the China Federation of Logistics and Purchasing.
• In 2023, China renovated 53,700 aging residential communities, benefiting approximately 8.97 million households, with total investments nearing CNY 240 billion (USD 33.78 billion). These renovations focused on improving heating systems, energy efficiency, and recreational facilities.
• The Indian government is also intensifying its construction efforts to address housing needs for its 1.3 billion citizens. Its projections indicate an investment of around USD 1.3 trillion in housing over the next three years, aiming to complete 60 million new homes by 2025.
• Japan is advancing towards energy-efficient buildings, driven by the Building Energy Conservation Act, which mandates that all buildings meet energy conservation standards by FY 2025. The updated Act sets ambitious targets for new constructions to achieve Zero Energy House/Building (ZEH/ZEB) levels of energy efficiency by 2030, with an average target for existing buildings by 2050.
• Given these developments and the overall growth of the construction industry in the Asia-Pacific region, this area is expected to dominate the extruded polystyrene market in the coming years.