Polyethylene Insulation Materials Market size is forecast to reach $30.9 billion by 2025 after growing at a CAGR of 8% during 2020-2025. Polyethylene Insulation Materials is durable, lightweight, dust repellent, and highly resistant to heat. The growth of the market of polyethylene insulation materials is expected to be driven by the high demand from the electrical and electronics industry. The other growth factor is telecommunication industry which is using polyethylene insulation materials for insulating wire and cables.
By Type- Segment Analysis
High-Density Polyethylene (HDPE) segment held the largest share in the polyethylene insulation materials in 2019. HDPE is a cost-effective and tough polyethylene. It is manufactured at a relatively lower temperature and lower pressure. HDPE has desirable qualities such as high tensile strength, weather and water resistance, translucency, high toughness at low temperatures, and reasonably good chemical resistance. It has excellent resistance against solvents, dilute acids, alkalis, and alcohols, and reasonable resistance to oils and greases. Lastly, it is very desirable electrical insulation properties as well. HDPE is used in a wide variety of products. Some of the packaging applications include crates, trays, ice boxes, and caps on bottles, drums and bulk containers. One-third of all the toys in the world are made using HDPE. Due to HDPE’s robustness and chemical resistance, it is also used to make pipes.
Low Density Polyethylene (LDPE) segment held the second largest share in the polyethylene insulation materials. LDPE is a relatively lower density translucent polymer. It has a semi-rigid structure. It is manufactured under a much higher pressure than is the case with HDPE. LDPE has a higher degree of short and long branching which results in intermolecular forces that are not as strong as in HDPE. Hence, the crystal structure is not as tightly packed. This is the primary reason why LDPE has higher ductility and lower tensile strength. LDPE has a good resistance to dilute acids, alkalis, and alcohols. However, the material shows average resistance against aliphatic and aromatic hydrocarbons, mineral oils, oxidizing agents, and halogen hydrocarbons. LDPE exhibits high impact strength at low temperatures. Like HDPE, electrical insulating properties are favorable as well. It is also FDA compliant, which makes it useful in the area of food packaging.
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By Application- Segment Analysis
Wires and cables has been the primary application for polyethylene insulation materials in 2019. Polyurethanes insulation materials are the important component for insulating wire and cables that consumers use every day. The good thermal insulating properties of polyurethane insulation materials are the result of combining a solid, closed-cell foam structure with resistant heat transfer of cell gases. Owing to its high resistivity properties, polyethylene insulation materials are the most commonly used materials for wiring and cable insulation. However, due to its low temperature, it is mainly used for the communication cable insulation. Increasing urbanization and rapidly growing building infrastructure are the major factors driving the growth of wire and cable industries. These factors have impacted the energy and power demand in residential, commercial, and industrial sectors. Increased investments in smart grids and upgrading power transmission and distribution systems are expected to further drive the market. Adoption of smart grid technology has fulfilled the rising need for grid interconnections, significantly resulting in rising investments in the new submarine and underground cables. In addition, growing offshore wind farms, high voltage direct current links, and grid interconnections are projected to fuel the growth of the market of polyethylene insulation materials. Roof and windows insulation is the second major application for polyethylene insulation materials. According to the U.S. Department of Energy, heating and cooling account for about 56 percent of the energy use in a typical U.S. home, making it the largest energy expense for most homes. To maintain uniform temperature and lower noise levels in homes and commercial properties, builders turn to rigid polyurethane and polyisocyanate foam. These foams are effective insulation materials that can be used in roof and wall insulation, insulated windows, doors and air barrier sealants.
By End user – Segment Analysis
Building and Construction sector has been the primary market for polyethylene insulation materials in 2019 growing at CAGR of 10%. With its excellent insulation properties, durability and versatility, polyurethane insulation materials is frequently used in building and construction applications. Both the affordability of these versatile materials and the comfort they provide homeowners have made polyurethane insulation materials in homes. The growth of polyethylene insulation materials can be taken as directly proportional to the growth of construction industry. By 2020, construction output is estimated to grow by 70% to $12.7 trillion and will account for 14.6% of the world output with some of the larger emerging markets such as China, India, Russia, Brazil and Poland driving growth, along with U.S. Global GDP growth of 3.5% and 3.6% is expected in 2017 and 2018 respectively however the meteoric growth that outpaces global GDP will be concentrated in countries like China, India and U.S. India will overtake Japan as the third-largest construction market with annual growth averaging 7.4% annually in construction.
Apart from construction, automotive sector is also fueling the polyethylene insulation materials market. In automotive sector, polyethylene insulation materials are used in insulation. The growth of the polyethylene insulation materials can be attributed to the rise in production of automobiles. It is expected that the amount of polyethylene insulation materials used in the production of automobiles will double in the next 15 years. According to International Organization of Motor Vehicle Manufacturers the total production of automobile (commercial as well as Personal) globally in the year 2019 was 91,786,861 units compare to 96,869,020 units in 2018. This will drive the market of polyethylene insulation materials in the forecast period.
Geography – Segment Analysis
APAC dominates the polyethylene insulation materials market with a share of 40% followed by North America and Europe. The economy of APAC is mainly influenced by the economic dynamics of countries such as China and India, but with growing foreign direct investment for economic development of South East Asia, the current scenario is changing. Countries in South East Asia are witnessing high growth in the energy and telecommunication sector. Polyethylene insulation materials are used in the insulation of wires and cables which provide connectivity in the telecommunication sector. In addition, the telecommunication sector is a unique and vibrant industry that is constantly evolving due to the new technologies and infrastructure which continue to filter into the market. The overall global telecommunication statistics are impressive.
In 2020 there are around 7.7 billion active mobile broadband subscriptions worldwide, an enormous rise from 3.3 billion just 5 years ago. In 2020 there are over 1.1 billion fixed broadband subscribers globally a rise from around 830 million in 2015, indicating there is still room for growth in the fixed broadband sector. Operators around the world have experienced challenging issues in recent years and will embrace the improved services and opportunities offered by 5G and fiber-based broadband. Some of the other factors behind the growth of the telecommunication sector worldwide include, affordability of services, innovative services such as e-agriculture and e-education, and demand for high speed internet. The global energy sector is the second most major application for polyethylene insulation materials.
The polyethylene insulation materials are used in energy sector to protect the equipment from heat by providing them thermal insulation. The key factors leading the global energy sector growth are improvements in energy efficiency within individual sectors, increase in energy demand, growing international agreements on climate and climate-friendly energy solutions, and government initiatives. The continuous technological advancements and new developments are unlocking potential right across the energy sector and creating an ample number of opportunities in the global energy market growth. Nearly 85% of the industrial processes are using non-renewable energy sources which lead the industrial market growth in the global energy sector during the forecast period. Government & research institutions are making massive investments for better technologies to extract energy from renewable sources and are expected to increase energy efficiency.
The coronavirus pandemic has had far-reaching consequences beyond the spread of the disease and efforts to quarantine it. As the pandemic has spread around the globe, concerns have shifted from supply-side manufacturing issues to decreased business. The current epidemic outbreak has deeply influenced consumers’ daily life and in addition to the impact on construction and automotive sector. South Korea, Italy and Japan are the most affected among the major industrialized economies. Consequently, 80 percent of automotive and related companies report that Coronavirus will have a direct impact on their 2020 revenues. 78 percent of companies do not have enough staff to run a full production line. More than 80 percent of the world’s auto supply chain is connected to China. In January 2020 China’s car sales plunged by 18 percent. The China Passenger Car Association (CPCA) considers that the first two-month sales could decline by 40 percent or more compared to the same period in 2019. Production shortfalls resulting from supply chain disruptions in China will impact global automakers. While Moody’s Investor Service adjusted its global vehicle sales forecast to be down 2.5 percent in 2020 instead of a previous 0.9 percent drop due to the Covid-19 outbreak, it now looks in general more like a 6-8 percent down this year, with knock-on effects into 2021.
Drivers – Polyethylene Insulation Materials Market
Rise in demand of polyethylene insulation material from electrical and electronics industry
The use of polyethylene insulation material is rising in electrical and electronics industry. Polyethylene insulation material are highly preferred for electrical insulation and film packaging. The digital economy supported the development of many electronic appliances such as smart phones, watches, TVs, refrigerators, security systems, and environmentally friendly electric vehicles. The energy consumption in Asia-Pacific is expected to grow by 48% over the next three decades. According to IEA, China alone is expected to contribute to 30% of the world’s energy increase until 2023. Increasing usage of electricity in industries, growing electronics and electrical production are expected to drive the market for polyethylene insulation material in the forecast period.
Mass consumption of Polyethylene insulation materials in Automotive and Construction Industries
The increase in global automobile production is a major factor which influence the growth of polyethylene insulation materials market across the globe. Polyethylene insulation materials are available in different densities with the ultra-high molecular weight grade, offering toughness that outlasts steel in some applications. This, in turn, contributes to the growing demand for polyethylene insulation materials from the automotive industry. According to the World Economic Forum the Middle East and North Africa region is undergoing a transformation of urbanization trend that will see a very large number of people moving to key cities. The construction industry in these region are increasing at the rate of 10%. Thus it will augment the consumption and growth of polyethylene insulation materials in Middle East and North Africa regions.
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Challenges – Polyethylene Insulation Materials Market
High manufacturing cost can restrict the growth of the market in the forecast period
The manufacturing cost of polyethylene insulation material is high which yields into high cost of finished goods. Secondly, the raw material which is used in the production of polyethylene insulation material is also costly. The production of these materials require high skilled labors because of the high accuracy of temperature adjustment needed in there manufacturing. In present, there is no any substitute to reduce the price in production of polyethylene insulation materials. These are the major restraint which affect the market of polyethylene insulation materials in near future.
Production and decomposition of polyethylene insulation material will degrade the environment
Producing polyethylene insulation material takes a large amount of energy and also leads to high emissions of carbon dioxide, a greenhouse gas contributing to global warming and climate change. The polyethylene insulation material takes a long time to break down and end up in landfill sites for decades. Any way to dispose of polyethylene insulation material is incineration, which can result in harmful gas emissions. Though it is technically possible to recycle the majority of plastic polymers, there are many different types to sort through, which is expensive and complex. These are the major restraint which affect the market of polyethylene insulation materials in near future.
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the polyethylene insulation materials. Major players in the polyethylene insulation materials market are 3H Vinacom Co., Ltd, Akzonoble N V, Borealis Ag, Exxonmobil Chemical Company, Inc., Hanwha Chemical and others.
Acquisitions/Technology Launches /Product launches
In March 2015, Armacell International S.A., a leader in flexible insulation foams for the equipment insulation market and a leading provider of engineered foams, acquired the business of Industrial Thermo Polymers Limited (ITP), a leading manufacturer of extruded polyethylene foam products in North America. The combination creates a leading manufacturer of polyethylene insulation foams on the North American continent.
In October 2018, LyondellBasell is introducing several new low and high density polyethylene grades that outperform industry standards used in cable applications. Produced using LyondellBasell’s Hostalen ACP technology, the new Petrothene KR52828E grade is a multimodal high density polyethylene (HDPE) used in medium voltage jacketing for outdoor power cables.
Asia-Pacific dominates the polyethylene insulation materials market owing to increasing demand from energy sector.
Rapid urbanization is likely to act as an opportunity in the growth of the market of polyethylene insulation materials in the forecast period.
Volatility in the prices of raw material and regulatory intervention from the environment bodies is projected to hamper the growth of the market during the forecast period.
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