ANALYSIS: Unfavorable premises for the insulation market at the end of 2013

The local market of polystyrene decreased between 12% and 15% in the first six months of this year compared to the same period in 2012, given the shrinking of about 13% - 15% of imports of raw material for the production of expanded polystyrene, as reported by the National Statistics Institute (INS). In what concerns the domestic supplies of mineral wool (glass and basalt) the field operators indicate a stabilization at the level of the previous year, given that the prevailing demand continued to come from the industrial and commercial centers segments. Currently, the domestic polystyrene market is valued at about 100 million EUR per year. In 2012,  a quantity of 47,000 tons of raw materials, needed to run the production process, has been imported. In what concerns the segment of mineral wool producers and importers, they share a much smaller market in terms of value and quantity, but equally competitive. On the local market of expanded polystyrene (EPS) are active more than 50 manufacturers, which have a total production capacity of 7.45 million cubic meters, way over the demand in the area, estimated at about 3.5 million cubic meters. Furthermore, the main orders for EPS are due to the national thermal rehabilitation program, even if the latter is not carried out yet at optimal levels. The price remains the determining factor in the decision of purchase of polystyrene, despite the fact that the producers point out that most of the times a low price indicates a poor quality of the product and may compromise the quality of the insulation work. According to market representatives, currently in Romania about 50 % of the products on store shelves have deficiencies in their labeling. "In 2013 we had, from the beginning, to increase the price of our products by 10% - 12%. The decision was taken due to the higher prices of raw materials notation that we import, but also because of rising utility prices", said Laurenţiu Istrate, general manager of Austrotherm, one of the leading companies on local market polystyrene, and the president of the Association of Expandable Polystyrene Manufacturers from Romania (ROMEPS).