US law begins to boost demand for polyurethane insulation – Covestro

Al Greenwood


SAN ANTONIO, Texas (ICIS)–A US law intended to promote energy efficiency is beginning to stimulate demand for polyurethane insulation, an official with Covestro said on Tuesday.

The law, called the Inflation Reduction Act (IRA), is relatively new, so it is just now beginning to have an impact, said Judi Bayer, head rigid raw materials for Covestro. She made her comments on the sidelines of the Polyurethanes Technical Conference, held by the Center for the Polyurethanes Industry (CPI).

Polyurethane spray foam and polyisocyanurate board stand to benefit from such energy-efficiency policies because they are among the strongest insulating materials available. Spray foam has the additional benefit of functioning as a building envelope, which prevents air leakage.

Bayer said there are signs that home builders in the US are increasing construction activity to address the shortage of available housing.

She pointed to number of US housing starts for single-family homes.

Although the number of housing starts fell in August from July, they rose year on year and they were up from the winter and spring months, as shown in the following chart. Figures are not seasonally adjusted.

Source: US Census Bureau

Nonetheless, high costs are making it more difficult for consumers to afford a new house. Higher mortgage rates, higher material costs and higher labour costs have all made new houses increasingly unaffordable.

And because of the shortage of more affordable existing houses, consumers often have little choice but to buy a more expensive new house.

Home builders are taking steps to get costs under control, such as reducing the size of housing.

Automobiles are an important end-market for flexible polyurethane foam, and for much of 2023, automobile sales have been increasing globally by the mid single digits, said Scott Skolnekovich, vice president flexible foam, performance materials North America, Covestro.

For North America, the growth rate for automobile sales has been in the high single digits, he said.

Automobiles have stood out among major polyurethane end-markets because of its growth, he said. Other major end-markets for flexible foams have not been as robust.

Flexible foam demand for furniture and mattress production has been lagging because consumers had splurged on these purchases during the depths of the coronavirus pandemic, Skolnekovich said.

Purchases that consumers would have normally made in the future were made during the pandemic years, he said.

Since then, consumers are spending their money on services such as travel instead of big-ticket items such as furniture and other durable goods, Skolnekovich said.

Inflation is also discouraging sales of furniture and mattresses, but not to the same extent as changing consumer habits, he said.

The Polyurethanes Technical Conference runs through Wednesday.

Polyurethanes are made with isocyanates and polyols.

Interview article by Al Greenwood

Recasts tenth paragraph to read “mid single digits” instead of “low single digits”


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