Eco demand heats up mineral wool

Environment, environment, environment; a recurring theme in the mineral wool industry. Whether it is the drive towards energy efficient and sustainable buildings or the recycling of raw materials and finished products, the environmental agenda is at the heart of many of the opportunities and challenges faced by the mineral wool industry.

Global markets for building insulation suffered last year as the worldwide economic crisis unravelled and the industry increasingly felt the pinch as construction activity declined during the year. In tandem, mineral wool producers felt the impact of higher raw material costs, including fuel. Across the board, many leading producers cut back supply and reduced investment levels in order to meet the lower levels of demand.

In 2009, certain markets have shown some signs of recovery and the industry can begin to look forward to a brighter future as environmental concerns should drive demand forward. This article reviews mineral wool markets, highlighting the major trends, and reviews some of the major players which shape the industry.

Heating up the market: production of mineral wool at
one of Rockwool’s plants.  Courtesy Rockwool International A/S

From its first discovery in Hawaii on the slopes of the volcanoes, mineral wool has come a long way. Today, it is one of the leading thermal and acoustic insulation materials used worldwide. In this article, the term mineral wool covers glass wool, rock (stone) wool and slag wool, all of which consume industrial minerals.

Essentially, the three mineral wool products have comparable uses in industry with some exceptions, and also have similar manufacturing processes. However, they originate from quite different raw materials (see panel).

Building on demand

Mineral wool, of all three types, is a leading insulation product for residential, commercial and industrial applications, which are shown in Table 1. It has high thermal resistance combined with long term stability, and also acts as a flame retardant. This is combined with the fact that it has exceptional acoustic insulation properties, and is also chemically inert.

Rock and slag wool can withstand temperatures of up to 1,500°C before melting, whereas glass wool will begin to melt at around 600°C. Rock wool’s properties derive from its chemical composition and its mat-like structure made up of fibres, which prevent the movement of air.

Table 1: Common applications for mineral wool in buildings

A recent industry study by the Freedonia Group Inc., World Insulation, noted that insulation markets in the Asia Pacific region grew by 10.3% between 2002 and 2007. The report forecasts that the markets will continue to grow in the region at a rate of 6% per annum. Most of the growth in expected in China, as building and construction continue apace, and the Chinese government initiatives promote more energy efficient buildings.

Growth is also expected in other countries, including those in Latin America, Eastern Europe, Africa and the Middle East, particularly in construction, but also in industrial appliances, heating, ventilation and air conditioning activities.

European market

The European insulation market was worth an estimated €6,710m. in 2008, according to Rockwool International A/S, of which mineral wool accounted for 55-60%. The other main player in European insulation is plastic foam which represented 40-45% of the total. The few other speciality insulation materials take the remaining 3-5% of the market. The percentage share of the market between mineral wool and plastic foam insulation has remained approximately the same over the last decade.

The mineral wool market in Europe is split roughly 50:50 between glass wool and stone wool, giving each an approximate market value of €1,700-€2,000m. The European market is forecast to grow at a moderate rate of 1% pa until 2012.

In 2008, projects which were already financed and underway helped to maintain activity levels in the mineral wool industry. In Europe, prices for mineral wool held up, despite the drop in sales volumes. However, the slowdown was particularly acute in new residential homes, with the UK and Spain experiencing dramatic declines in volumes. Other European countries fared better, including France, Germany and Benelux. Russia was another region where sales of insulation products tailed off in the third quarter.

North America

The situation is quite different in the North American insulation market, compared to its European counterpart. Glass mineral wool has a much larger share of the total market of 50-55%, some ten times that of stone mineral wool, which has a share of approximately 5%. According to the Freedonia Group study, glass wool is forecast to expand its presence outside North America, and increase its overall market share worldwide.

The total North American market is estimated to be worth $7,730m. Plastic insulation foam has a 25-30% share, and 15-20% of the market is taken by other forms of insulation. The glass wool insulation market is worth an estimated $3,800-$4,200m., compared with $390m. for stone wool.

The key market for glass wool products is flexible products, whereas the key market for foam plastics is in rigid products which are mainly used in technical insulation and non-residential applications such as facade foundations, flat roofs and sandwich panels. Stone wool covers both flexible and rigid products from 25 kg/m³ to 180kg/m³.

In 2008, the downturn hit the US construction industry hard. Housing starts at the end of the year were 550,000 units, the lowest level since the 1940s, and less than 25% of the peak levels in 2006. This in turn impacted mineral wool producers, with many fibre glass insulation plants closed for periods of time to match production with demand. Prices too plummeted during 2008 for mineral wool, and there have been no opportunities to raise them.

Eco codes driving market

Building codes and recommendations are calling for higher R-values in new and existing homes. Driving this are the increased costs of heating, and in some parts of the world, cooling, and a growing awareness of the important role that insulation has to play in reducing energy use and greenhouse gas emissions.

According to the US Department of Energy (DOE), buildings consume 40% of the energy in the USA, accounting for more than 43% of the country’s greenhouse gas emissions – more than industry and transportation. The DOE also estimates that 80m. houses in the US are under-insulated, which accounts for over 62,000m. lbs of carbon dioxide emissions into the atmosphere each year.

A recent management report from global consultancy firm, McKinsey & Co., identified building insulation as the most cost-effective greenhouse gas abatement measure. With this in mind, many governments are now offering tax incentives and grants for home energy efficiency improvements.

The introduction of stricter energy requirements for new buildings is in part counteracting the declining activity this year but not enough to overcome the overall downturn. However, the schemes for energy renovation of existing buildings are currently having a mixed effect. In Germany it has led to sales growth for insulation products, whereas the 3^rd CERT scheme in the UK is not having so great an impact.

European initiatives

The European Union (EU) has made a major commitment to improve energy efficiency by 20% by 2020. This target could be raised to 30% if an ambitious international climate agreement is reached at the UN Climate Summit in Copenhagen in December 2009.

A key component to achieving CO₂ emissions reduction is the use of better insulation in buildings. In late 2008, the European Commission (EC) launched its proposal for an improved Energy Performance of Buildings Directive, which replaces the existing directive issued in 2002.

Table 2 shows which countries are implementing the standards for new homes first, and what level they will be introduced at. All of these measures mean that the markets for insulating materials are set to increase rather than decline as the new standards are brought in across the EU.

Table 2: EU countries’ timelines for new efficiency measures

The UK is doubly targeting savings and increasing subsidies between 2009 and 2011, and has set aside £3,000m. ($4,900m.) to build and renovate low income housing and promote new energies, and another £1,800m. ($2,900m.) in home loan repayments.

The Netherlands is aiming to improve energy efficiency by 30% in 200-300,000 buildings per year, and Belgium and Spain have both launched ambitious renovation programmes. Spain is to spend €8,000m. on municipal funds for construction, along with €110m. to renovate housing, €400m. to renovate public buildings and €75m. to upgrade military facilities.

A global effort

Outside the EU, Russia is aiming to reduce energy consumption by 40% in 2020 compared with 2007, and this year the government is putting federal laws in place to achieve this. In China, $110,000m. has been put aside for rebuilding in Sichuan province, along with $71,000m. for infrastructure and home building. The country has also earmarked $23,000m. for energy efficient projects.

In the USA, the Obama administration launched ambitious energy savings initiatives within its stimulus package back in February 2009. This included over $25,000m. for federal buildings improvement, and energy efficiency related grants to make low-income homes more energy efficient. A $2,000 tax credit is also available nationwide to residential homeowners who insulate properly and make their existing properties more energy efficient.

In Mexico, a government-backed green mortgage programme offers benefits to buyers of energy efficient homes, and in Australia the government will install free ceiling insulation in around 2.7m. national homes.
 

Eco concerns: mineral wool’s use in insulation is garnerin
more attention thanks to the construction of energy efficient
homes, such as passive houses (pictured).  Courtesy
Rockwool International A/S

Leading producers

The mineral wool industry is dominated by three global producers: Rockwool International A/S of Denmark; German family-owned company, Knauf Insulation; and French group, Saint Gobain. All three have subsidiaries worldwide and production under licensing agreements.

There are four leading producers of stone wool in Europe, namely Rockwool International; Paroc Group Oy ab; Knauf Insulation; and Saint Gobain Insulation Division. Knauf and Saint Gobain, along with Uralita, are also the main players in the glass wool sector in Europe.

Table 3: European mineral wool producers

Saint Gobain is also a key supplier of glass wool in North America, alongside Owens-Corning, Johns-Manville and Knauf. The stone wool industry in North America is mainly supplied by Rockwool International, Fibrex, Thermofiber and Industrial Insulation Group (IIG). All the main companies producing mineral wool in North America are listed in Table 4.

Table 4: Leading North American mineral wool producers

Source: NAIMA

Rockwool International A/S

Based in Denmark, Rockwool International is the global leader in the production of rock wool, and the world’s second largest producer of insulation materials. Insulation accounts for 83% of the company’s business, which in 2008 was a turnover of DKK13,700m. ($2,600m.)

The company operates 21 stone wool factories worldwide, with 19 in Europe, two in North America and one in Asia. Over 60% of Rockwood Insulation’s sales are within the EU. In the first quarter of 2009, the company began production at its €90m. plant in Milton, Canada. The plant has a capacity of 100,000 tpa. Elsewhere, the company is planning a 100-120,000 tpa plant in Volga, Russia, and a 30,000 tpa plant in Dahej, Gujarat state, India. Investment in the Indian plant will be €18.5m. and will open up export opportunities for Rockwool to the Middle East.

Knauf Insulation

Another leading insulation manufacturer worldwide is Knauf Insulation, which has a turnover of more than €1,000m. The company has grown extensively over the last few years and is currently rolling out new manufacturing sites across the world for glass mineral wool and rock mineral wool, and is upgrading existing facilities to increase output and cost efficiency. The company operates 30 plants producing glass mineral wool, rock mineral wool, wood wool, extruded polystyrene (XPS) and expanded polystyrene (EPS).

In 2006, Knauf purchased Heraklith AG, which gave it a leading position in the stone wool and wood wool markets, with most of its activities in Central and Eastern Europe. The company is also the second largest glass wool producer in the USA, using its own technology. The company has three plants.

Uralita

Spanish company Ursa is Europe’s third largest manufacturer of insulation materials through its subsidiary, Uralita. The company operates 16 plants throughout Europe and Russia, and is a leading producer of glass wool and extruded polystyrene insulation products. Glass wool is manufactured in Spain, France, Belgium, Germany, Slovenia, Hungary, Poland, Turkey, and two Russian plants.


The global insulation market is worth an estimated
€23,000m.  Courtesy Rockwool International A/S

Saint Gobain

Corporate giant, Saint Gobain, is a world leader through its Isovar range of insulation products, and through the CertainTeed brand in North America. Indeed, the company makes the claim that one in three homes in Europe has Isovar insulation, and the figure in the USA is one in every five homes. In the total, the company has 62 production sites worldwide for mineral wool and expanded polystyrene, and 12 licence holders of its technology. In 2008, net sales for insulation arm were €2,700m.

Saint Gobain produces a range of insulation products, including glass and stone wool, expanded and extruded polystyrene, and natural insulation products such as hempwool. In 2008, the company brought a new glass wool line on stream in Gliwice, Poland, to offer new higher clue added products, and also acquired the leading Japanese glass wool manufacturer, MAG.

Owens-Corning

Owens-Corning is the leading producer of glass fibre (glass wool) insulation in North America, and one of the top producers worldwide. The company has 13 fibre glass insulation manufacturing facilities in North America, and three in China (Table 5), and additionally has technology under license to a number of producers. In the past, the company has produced rock wool, but now these facilities have all been divested.

Table 5: Owens-Corning fibre glass insulation operations

Recycling

Sustainability is now increasingly important in today’s marketplace, with questions asked about the provenance of the products, how they are manufactured, delivered and used. It is one that has been embraced by the major insulation companies, including Saint Gobain, Rockwool International and Owens-Corning, who are leading by example.

A 2007 survey carried out by the North American Insulation Manufacturers Association found that its member companies handled 4,200m. lbs (1.9m. tonnes) of recycled materials in the production of residential, commercial, industrial, air handling, thermal and acoustic insulation. This represents an overall increase of 62% since the last survey, which was carried out in 2005.

The amount of recycled post consumer glass consumed in glass wool manufacture rose by 107% in the USA to 1.31m. tonnes, up from 630,000 tonnes in 2005. There is also an increase in the use of reclaimed slag. Over the last three years in the USA, the use of reclaimed slag jumped by 55.5% to 340,000 tonnes. Rock and slag wool insulation typically contain 20-25% slag, and can contain up to 70-85% slag, depending on the specific product.

Another recycled material supplied to rock wool producers is aluminium salt slag, produced as a residue from secondary aluminium smelting. German company AGOR AG has a 30% global market share in the treatment of the slags, from which it produces Serox, amongst other products. Serox is a fine grained mineral substance, with a high alumina content, used in mineral wool production as a substitute for bauxite.

Owens-Corning has been working to increase the recycled content of its products. To that end, the Owens-Corning Fiberglass™ insulation is guaranteed to contain at least 40% recycled content, which is the highest certified level in North America for glass wool insulation. Owens-Corning mainly uses post-industrial cullet, and also some post consumer recycled glass.

The use of recycled glass also reduces energy consumption in the manufacturing process, lowering the melt temperature. Further growth in the amount of recycled glass used in glass wool manufacture is constrained by the availability of clean recycled glass. Impurities can cause blockages in the tiny holes used to create the fibres.

Saint Gobain Isover is launching a new generation of glass wool products, which will be available in France from mid-October. The product, called G3, is marketed as meeting the criteria of sustainable construction, and more specifically complies with France’s energy efficient building (BBC) and high environmental quality (HQE^®) labels.

One of the main deliverables of the new G3 product is that it has a very low environmental impact as it contains 95% sand and recycled glass, which provides excellent end-of-life recyclability. The insulation is highly compressed, to reduce transport costs, and the manufacturing process uses 4% less energy and 6% less water than previous generations of glass wool. The other environmental benefit of G3 is its reduced usage of volatile organic compounds (VOC), due to the incorporation of organic and plant-based binders.

Knauf Insulation is also launching a new range of mineral wool products, with its ECOSE^® technology binders. These natural formaldehyde-free binders are made from rapidly renewable organic materials, rather than oil-based chemicals. The binders enhance the green credentials of the wool, without affecting its thermal, acoustic or fire performance.

Contributor: Alison Russell is an independent contributor to IM. She was formerly Deputy Editor IM, and Editor Mineral PriceWatch.

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Mineral wool raw materials

Rock or stone wool: Essentially made from a magmatic rock such as basalt, diabase, dolerite, gabbro or amphibolite. An increasing proportion of the raw materials feed is recycled stone wool in the form of briquettes. Generally, about 98% of the wool is the primary raw material, usually basalt, and the remainder is organic content as a thermosetting resin binder and a small amount of mineral oil.

Other elements can be added such as alumina in the form of bauxite or alumina for improved product durability and increased flame retardancy, and boron to improve fused viscosity control.

Slag wool: This uses slag from blast furnaces as the raw material, and is processed in the same way as rock wool.

Glass wool (fibre glass): Produced from silica, limestone, soda ash, boron and cullet (recycled glass).