Asphalt Demand to Grow Over 7% Annually Through 2015

US demand for asphalt is forecast to increase 7.4 percent annually to nearly 35 million tons in 2015.  This is equivalent to 191 million barrels of primary asphalt, the vast majority of which is refined petroleum asphalt.  The expected growth represents a rebound from the 2005-2010 period, when consumption declined sharply due to the recession and a collapse in building construction.  Growth will result primarily from the recovery of new residential construction from its weak 2010 levels, benefiting both roofing and paving products.  Gains will be moderated slightly by slower than average growth in both residential and nonresidential improvement and repair applications. These and other trends, including market share and product segmentation, are presented in US Asphalt, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Paving products accounted for 80 percent of asphalt consumption in 2010.  Demand for asphalt paving products will benefit from an expected increase in federal and state spending on highway and road construction.  Growth will advance from a weak 2010 base, when high asphalt prices led to a rollback in paving activity and a greater emphasis on repair as opposed to replacement of roads.  As the growth in paving asphalt prices moderates, the volume of paving asphalt consumed will expand.  Overall, demand for asphalt in paving uses is forecast to increase 7.8 percent annually to 28.5 million tons in 2015.

Demand for asphalt in roofing and other applications is forecast to rise 5.6 percent annually to 6.3 million tons in 2015.  This will be a considerable improvement from the very weak levels of 2010.  Growth will reflect a recovery in construction of single-family housing, which will benefit asphalt roofing used in steep slope applications, primarily asphalt shingles.  Demand will also benefit from the growing consumption of modified asphaltic membranes in low-slope roofing applications, although much of this is a replacement for conventional built-up asphaltic roofing, which uses greater quantities of asphalt per square of roof surface.  Gains will also reflect a recovery in nonresidential building activity, which was negatively impacted by the recession, although not as dramatically as residential construction.  Finally, growth opportunities will continue to exist in maintenance and repair applications in both residential and nonresidential markets.

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.