1 October 2019

PIR market forecasts

PIR polyisocyanurate foam is a material invented almost a hundred years ago. It was appreciated in aviation and space programs, where it appeared in the 60's. Like many other technologies, soon afterwards it found a wide application in the civil market. In Poland, polyurethane insulation materials were used only in the 1990s, but lost out to basic materials such as mineral wool and polystyrene at that time. Over the last decade, however, it was insulation and multi-layer panels with a PIR core that gained advantage over other materials.

Forecasts for the PIR market for the coming years

The sustained economic growth in Poland is conducive to investments in which PIR boards are widely used. The industrial and warehouse construction segment is not weakening, which results in further construction of new halls and plants using PIR core boards. Companies that renovate existing facilities are equally eager to use this excellent insulation material. Just behind them is agriculture, co-financed from EU programs, which invests in modern livestock buildings, where PIR panels are the leading insulation material. The trend of PIR share growth continues and reaches a few percent per annum. This is done mainly at the expense of ordinary foamed polystyrene insulations, which PIR foam is increasingly boldly pushing out of the market. Already in 2015, over 70% of sandwich panels, mainly in the facade installation, were filled with PIR core. The market can only be shaken by price spikes, as was the case between the fourth quarter of 2016 and the first quarter of 2018. Then the price of basic raw material for the production of foam, which is methylene diphenyl diisocyanate (MDI), increased by nearly 60%. This situation translated into a significant decrease in gross margin from over 33% in 2016 to 29% in 2017. It was not until the turn of 2017 and 2018 that prices stabilized, albeit at a still high level, and then gradually decreased.

According to ICIS data, MDI prices in Europe fell to EUR 1.3-1.5/kg (from around EUR 2.7/kg in 2018) in the first quarter of 2019.

The price crisis did not only affect the MDI raw material but also the whole construction chemicals. In addition, the availability of isocyanate has decreased due to the failure of some production sites, as well as a reduction in production at several European sites. In addition, polyurethane foams are increasing their share in the automotive industry, which has a negative impact on prices and the availability of this chemical in the construction industry. It follows that in order to achieve the best possible price and availability stability, a new, large and efficient player in the construction chemicals market is needed to ensure greater price competitiveness and guaranteed product availability. Only by doing so will it be possible to keep prices at a uniform level. Many companies, in order not to pass on the increase to their customers, have reduced their margins. Thanks to this, foam prices increased not by 30%, but only by 15%.

Price increases in raw material are unavoidable. The steadily growing share of polyurethanes in the construction and automotive industries translates directly into increases. Not only manufacturers of construction chemicals, but also the entire construction and real estate development industry - and consequently also apartment buyers and those planning apartment renovations- are feeling the effects of the surges in raw material prices. This results from a very wide range of applications of PIR foam in the construction industry.
Forecasts for the PIR market for the coming years

PIR polyurethane use

Polyurethane insulations are characterized by excellent physicochemical properties. The lightweight material, resistant to compression and stretching, retains its parameters unchanged over a wide range of temperatures. The most important features that make it so predestined for the construction of insulation systems are its impermeability and very low thermal conductivity, reaching 0.0185 W/mK. Unlike PUR foams, PIR has a closed cell structure. Thanks to the indicated properties, this polyurethane has been used from thermal insulation of foundations to roofs. In the single-family building industry, the most common PIR board is found, depending on its intended use, in various types of cladding - white glass veil, micro-perforated with aluminium content, KRAFT paper, bitumen cladding and others. They are an excellent response to the growing demands on the construction of energy-efficient and even passive houses. Building regulations are becoming increasingly restrictive in this respect and the thickness of roof, wall and floor insulation would be unacceptable if someone would want to achieve satisfactory results with previous generations of insulation materials such as wool or foamed polystyrene. The use of PIR boards allows the insulation layer to be tens of percent thinner, while maintaining the required heat transfer parameters. Research on the assembly and construction market shows that polyisocyanurate foam has a predominant share in the application of multilayer panels used in industrial and public buildings.

The survey of the assembly and construction market shows that PIR is not endangered. The upward trend in the use of polyurethane continues, although it may be slowed down if the economy stagnates. The good news is the increase in supervision and quality control, as well as production compliance with the applicable standards. This will result in the disappearance from the market of defective materials produced by dishonest manufacturers, which may affect the good reputation of PIR boards.