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Asphalt Manufacturing in the U.S.

Worldwide annual consumption of asphalt is at more than 100 million tons. In the United States, generally 90% of liquid asphalt cement consumed is used for road paving and approximately 10% is used for roofing products, with other specialty applications accounting for only a very small fraction of consumption.

Though asphalt occurs naturally, the majority of today’s asphalt is produced as a residual product of the crude oil refining process. Most refiners focus on refining more expensive, lighter, “sweeter” crudes to produce the higher-value products such gasoline and diesel fuel. In all, about two to three percent of all refined crude oil in the United States becomes asphalt.

Most crude oil asphalt comes from less expensive, heavier, “sour” crude oils rather than the more expensive lighter, sweet crude oils. For crude oil refiners asphalt accounts for a much larger portion of the product refined.

Demand for asphalt is driven to a small degree by the private sector, but most demand comes from federal, state, and local governments. Funding for highway and road infrastructure construction and maintenance plays the largest role, but other public sector projects such as airport runway and taxiway construction can also affect demand. Since funding for highway and road construction and maintenance projects are often set for several years, demand tends to remain rather constant growing more or less at the rate of inflation. However, the recent prospect of massive infrastructure spending to stimulate growth in the U.S. economy under the new Obama administration suggest demand will likely increase significantly in the coming years.

Specialists in Business Information (SBI) estimates the U.S. market for liquid asphalt cement totaled $11.7 billion in 2008, up 34% from $8.7 billion in 2007. This report explains why, and forecasts what lies ahead for the asphalt industry from 2009 - 2013.

Scope of the Report

This SBI report contains data and analysis describing the U.S. market for asphalt. The report focuses on the primary commodity market, refined liquid asphalt cement, and the secondary product market, asphalt paving mixtures. In addition, limited data and analysis are provided for the asphalt shingle and coating materials manufacturing market (asphalt roofing products). Chapter 3 covers the liquid asphalt cement market while Chapter 4 covers the asphalt paving mixtures and asphalt roofing products market. SBI refers to the asphalt paving and roofing markets as the asphalt products market. Chapter 5 covers the competitive landscape of asphalt refiners and blenders with data and analysis on U.S. asphalt refining capacity and utilization including profiles of major asphalt refiners, blenders, and paving mixture manufacturers. Chapter 6 looks at economic and market trends affecting the asphalt industry. Included are an analysis and forecast through 2009 of gross domestic product (GDP), an in-depth cost and price analysis of various components of the asphalt market as well as the competing concrete market, and a look at the shift to warm mix, eco-challenges and weather/seasonality trends.. Finally, Chapter 7 provides a snapshot of the two end-user markets, asphalt paving and asphalt roofing.


Market Insights: A Selection From The Report


Asphalt Demand
Demand for asphalt is driven to a small degree by the private sector, but most demand comes from federal, state, and local governments. Funding for highway and road infrastructure construction and maintenance plays the largest role, but other public sector projects such as airport runway and taxiway construction can also affect demand. Since funding for highway and road construction and maintenance projects are often set for several years, demand tends to remain rather constant growing more or less at the rate of inflation. However, the recent prospect of massive infrastructure spending to stimulate growth in the U.S. economy under the new Obama administration suggest demand will likely increase significantly in the coming years.

U.S. Market Nears $12 Billion
SBI estimates the U.S. market for liquid asphalt cement totaled $11.7 billion in 2008, up 34% from $8.7 billion in 2007. According to SBI estimates, this followed a relatively modest decline in 2007 of six percent from the 2006 level of $9.3 billion and 44% gain over the 2005 level of $6.4 billion. The remarkable rise in value of the market over these few years came about as refiners began to cut back production of asphalt in favor of higher-valued, highermargin refined products resulting in an asphalt shortage that drove prices sharply higher. For the ten-year period between 1999 and 2008, the market grew at a compound annual growth rate (CAGR) of 16%, however, for the five-year period 2004-2008, growth was at a CAGR of 23%.

In the News


Asphalt Industry Big Winner in Obama Stimulus Plan

New York, January 28, 2009 - Thirty billion dollars is the current figure specified for highway construction in the American Recovery and Reinvestment Act moving swiftly toward signature by President Barack Obama. That’s a lot of asphalt!

The President’s commitment to a colossal investment in the nation’s road infrastructure is further reinforced by the proposed National Infrastructure Reinvestment Bank that will invest $60 billion over ten years and generate nearly two million new jobs. In the all-new report, Asphalt Manufacturing in the U.S., industrial market research publisher SBI estimates that as much as 28% of the proposed $60 billion will go towards increasing paving projects across American roads.

SBI subsequently expects the domestic asphalt industry to surge over the next four years and build on the nearly $12 billion the U.S. market for liquid asphalt cement totaled in 2008, which was a 34% increase from almost $9 billion in 2007. Through 2013, SBI forecasts the U.S. liquid asphalt cement market will top $16 billion accompanied by a compound annual growth rate (CAGR) of 7%. Overall, the U.S. asphalt products market is expected to grow at a CAGR of 10% through 2013 to over $38 billion compared to almost $24 billion in 2008.

“The major infrastructure spending expected by the Obama administration and a democratic Congress will mean greater demand for asphalt paving mixtures following the passage of a bill, which we at SBI expect may happen as early as spring 2009. The effects will be most noticeable in 2010 and beyond as state and local governments get their hands on much needed funds for projects already on hold,” says SBI Associate Publisher Shelley Carr.

Historically, the demand for asphalt is primarily driven by federal, state, and local governments seeking to fund highways and road infrastructure construction and maintenance.

Asphalt Manufacturing in the U.S. provides comprehensive market information for an asphalt industry certain to benefit from President Barack Obama's determination to create jobs in the U.S. quickly. Included are forecasts of what lies ahead for the asphalt industry from 2009-2013. The report focuses on the primary commodity market (refined liquid asphalt cement) and the secondary product market (asphalt paving mixtures). Limited data and analysis are also provided for the asphalt shingle and coating materials manufacturing market (asphalt roofing products).

About SBI
SBI (Specialists in Business Information) publishes research reports in the industrial, energy, building/construction, automotive/transportation and packaging markets. SBI also offers a full range of custom research services.

 

  • Executive Summary
    • Scope of the Report
      • Methodology
    • The U.S. Liquid Asphalt Cement Market
      • U.S. Market Nears $12 Billion
        • Table U.S. Liquid Asphalt Cement Value of Apparent Consumption and Year-over-Year Percentage Change, 1999-2008 (in millions of dollars)
        • Table U.S. Liquid Asphalt Cement Apparent Consumption by Volume, Average Price per Barrel, and Year-over-Year Percentage Changes, 1999-2008 (in millions of barrels)
      • Liquid Asphalt Cement Market Forecast
      • 2009 Production Increases Modest, Price Drops Significant
        • Table U.S. Liquid Asphalt Cement Value of Apparent Consumption Forecast and Year-over- Year Percentage Change, 2008-2013 (in millions of dollars)
        • Table U.S. Liquid Asphalt Cement Apparent Consumption by Volume, Average Price per Barrel Forecasts, and Year-over-Year Percentage Changes, 2008-2013 (in millions of barrels)
    • The U.S. Asphalt Products Market
      • Asphalt Products Market Reaches $24 Billion
        • Table U.S. Asphalt Products' Value of Apparent Consumption and Year-over-Year Percentage Change, 1999-2008 (in millions of dollars)
        • Table U.S. Asphalt Products' Apparent Consumption by Quantity, Average Price per Metric Ton, and Year-over-Year Percentage Changes, 1999-2008 (in thousand metric tons)
      • Asphalt Products Market to Top $38 billion by 2013
      • Paving Mixtures CAGR 14% by 2013
        • Table U.S. Asphalt Products' Market Forecast by Segment and Year-over-Year Percentage Changes: Asphalt Paving Mixtures and Shingle and Coating Materials, 2008-2013 (in millions of dollars)
    • Competitive Overview: Refiner Focus
      • Fragmented and Regional Business Landscape
    • Economic & Marketplace Trends
      • Real GDP Growth Projected at Negative 0.8% for 2009
      • Asphalt Product Producer Prices Skyrocket
      • Price Increases by Product
      • Asphalt Input Prices: Crude Up 75%+
      • Higher Prices on Input Materials for Concrete
      • Prices and Supply Jeopardizing Road Maintenance Budgets
      • Warming Weather Trends Benefit Marketplace
      • Re-Defining as a Green Industry
      • Labor Shortages and Immigration to Hamper Road Building
      • Warm Mix Asphalt Positioned to Usurp Hot Mix
    • End User Markets
      • Paving Industry Consumes 93% Asphalt Plus
      • Total Construction Spending Declines
        • Table Total U.S. Construction Spending and Year-over-Year Percent Change, 2002-2008 (in millions of dollars)
      • Highway & Street Construction Down from Mid-Decade
        • Table Total Highway & Street Construction Spending and Year-over-Year Percent Change, 2002-2008 (in billions of dollars)
        • Table Total State & Local Pavement Spending and Year-over-Year Percent Change, 2002- 2008
        • Table Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) Total Highway Spending (Excluding Transportation Research) and Year-over-Year Percent Change, 2005-2009 (in billions of dollars)
      • Non-Residential Pavement Contractor Revenue Affected by Price Fluctuations
        • Table Total Non-Residential Pavement Contractor Revenues and Year-over-Year Percent Change, 2002-2008 (in billions of dollars)
      • "Residential" Pavement Contractor Revenue Arcs Downward
        • Table Total "Residential" Pavement Contractor Revenues and Year-over-Year Percent Change, 2002-2008 (in billions of dollars)
      • Roofing Contractor Revenues Decline 16% in 2008
        • Table Total Roofing Contractor Revenues and Year-over-Year Percent Change, 2002-2008 (in billions of dollars)
  • Introduction
    • Scope of the Report
      • Methodology
      • Asphalt Primer
  • The U.S. Liquid Asphalt Cement Market
    • U.S. Market Nears $12 Billion
      • Table U.S. Liquid Asphalt Cement Value of Apparent Consumption and Year-over-Year Percentage Change, 1999-2008 (in millions of dollars)
      • Table U.S. Liquid Asphalt Cement Apparent Consumption by Volume, Average Price per Barrel, and Year-over-Year Percentage Changes, 1999-2008 (in millions of barrels)
      • Components of Trade
        • Table U.S. Liquid Asphalt Cement Value of Components of Trade, 1999-2008 (in millions of dollars)
        • Table U.S. Liquid Asphalt and Road Oil Supply and Disposition, 1999-2008 (in millions of barrels)
        • Table U.S. Liquid Asphalt Cement Value of Net Shipments and Year-over-Year Percentage Change, 1999-2008 (in millions of dollars)
        • Table U.S. Liquid Asphalt Cement Net Shipments by Volume, Average Price per Barrel, and Year-over-Year Percentage Changes, 1999-2008 (in millions of barrels)
        • Table U.S. Liquid Asphalt Cement Value of Imports and Year-over-Year Percentage Change, 1999-2008 (in millions of dollars)
        • Table U.S. Liquid Asphalt Cement Imports by Volume, Average Price per Barrel, and Yearover- Year Percentage Changes, 1999-2008 (in millions of barrels) Year Import Volume (millions of barrels)
        • Table U.S. Liquid Asphalt Cement Value of Exports and Year-over-Year Percentage Change, 1999-2008 (in millions of dollars)
        • Table U.S. Liquid Asphalt Cement Exports by Volume, Average Price per Barrel, and Yearover- Year Percentage Changes, 1999-2008 (in millions of barrels)
    • Market Forecast
      • Asphalt Cement Market Impacted by Supply, Demand and Commodity Pricing
      • 2009 Production Increases Modest, Price Drops Significant
        • Table U.S. Liquid Asphalt Cement Value of Apparent Consumption Forecast and Year-over- Year Percentage Change, 2008-2013 (in millions of dollars)
        • Table U.S. Liquid Asphalt Cement Apparent Consumption by Volume, Average Price per Barrel Forecasts, and Year-over-Year Percentage Changes, 2008-2013 (in millions of barrels)
  • The U.S. Asphalt Products Market
    • Asphalt Products Market Reaches $24 Billion
      • Table U.S. Asphalt Products' Value of Apparent Consumption and Year-over-Year Percentage Change, 1999-2008 (in millions of dollars)
      • Table U.S. Asphalt Products' Apparent Consumption by Quantity, Average Price per Metric Ton, and Year-over-Year Percentage Changes, 1999-2008 (in thousand metric tons)
    • Asphalt Paving Mixtures Market
      • Paving Mixtures Reaches $17 Billion
        • Table U.S. Asphalt Paving Mixtures Apparent Consumption Value and Year-over-Year Percentage Change, 1999-2008 (in millions of dollars)
        • Table U.S. Asphalt Paving Mixtures Apparent Consumption by Quantity, Average Price per Metric Ton, and Year-over-Year Percentage Changes, 1999-2008 (in thousand metric tons)
      • Components of Trade
        • Table U.S. Asphalt Paving Mixtures Components of Trade Value, 1999-2008 (in millions of dollars)
        • Table U.S. Asphalt Paving Mixtures Net Shipments Value (Shipments Less Exports) and Year-over-Year Percentage Changes, 1999-2008 (in millions of dollars)
        • Table U.S. Asphalt Paving Mixtures Net Shipments (Shipments Less Exports) by Quantity, Average Prices per Metric Ton, and Year-over-Year Percentage Changes, 1999-2008 (in million metric tons)
        • Table U.S. Asphalt Paving Mixtures Import Value and Year-over-Year Percentage Changes, 1999-2008 (in millions of dollars)
        • Table U.S. Asphalt Paving Mixtures' Imports by Quantity and Average Import Prices per Metric Ton, and Year-over-Year Percentage Changes, 1999-2008 (in thousand metric tons)
        • Table U.S. Asphalt Paving Mixtures' Export Value and Year-over-Year Percentage Changes, 1999-2008 (in millions of dollars)
        • Table U.S. Asphalt Paving Mixtures Exports by Quantity and Average Export Prices per Metric Ton, 1999-2008 (in thousand metric tons)
    • Asphalt Shingle and Coating Materials Market
      • Shingle and Coating Materials Slides to $7 billion
        • Table U.S. Asphalt Shingle and Coating Materials Apparent Consumption and Year-over-Year Percentage Changes, 1999-2008 (in millions of dollars)
        • Table U.S. Asphalt Shingle and Coating Materials Apparent Consumption by Quantity and Average Price per Metric Ton, and Year-over-Year Percentage Changes, 1999-2008 (in thousand metric tons)
      • Components of Trade
        • Table U.S. Asphalt Shingle & Coating Materials Value of Components of Trade, 1999-2008 (in millions of dollars)
        • Table U.S. Asphalt Shingle & Coating Materials Net Shipment Value (Shipments Less Exports) and Year-over-Year Percentage Changes, 1999-2008 (in millions of dollars)
        • Table U.S. Asphalt Paving Mixtures Net Shipments (Shipments Less Exports) by Quantity, Average Net Shipment Prices per Metric Ton, and Year-over-Year Percentage Changes, 1999-2008 (in millions metric tons)
        • Table U.S. Asphalt Shingle & Coating Materials Imports Value and Year-over-Year Percentage Changes, 1999-2008 (in millions of dollars)
        • Table U.S. Asphalt Shingle & Coating Materials Imports by Quantity, Average Import Prices per Metric Ton, and Year-over-Year Percentage Changes, 1999-2008 (in thousand metric tons)
        • Table U.S. Asphalt Shingle & Coating Materials Exports and Year-over-Year percentage Changes, 1999-2008 (in millions of dollars)
        • Table U.S. Asphalt Shingle & Coating Materials Exports by Quantity, Average Export Prices per Metric Ton, and Year-over-Year Percentage Changes, 1999-2008 (in thousand metric tons)
    • Market Forecast
      • Asphalt Products Market to Top $38 billion by 2013
      • Paving Mixtures to Grow at 14% CAGR
        • Table U.S. Asphalt Products' Market Forecast by Segment and Year-over-Year Percentage Changes: Asphalt Paving Mixtures and Shingle and Coating Materials, 2008-2013 (in millions of dollars)
        • Table U.S. Asphalt Paving Mixtures Forecast by Quantity, Average Price per Metric Ton, and Year-over-Year Percentage Changes, 2008-2013 (in millions of metric tons)
      • Roofing Products Will Soften in 2009
        • Table U.S. Asphalt Shingle and Coating Materials Forecast by Quantity, Average Price per Metric Ton, and Year-over-Year Percentage Changes, 2008-2013 (in millions of metric tons)
  • Competitive Overview
    • Introduction
      • Competitive Landscape Consists of Three Stages
      • Fragmented and Regional Business Landscape
        • Table U.S. Asphalt Production Capacity by Company, 2008 (barrels per day)
    • Asphalt Producer Profiles
      • Ergon, Inc
        • Table Ergon, Inc
      • Overview
      • Performance
      • Products
        • Table Selected Ergon Companies and Brands
      • Significant Events
    • Marathon Oil Corporation
      • Table Marathon Oil Corporation
      • Overview
      • Performance
      • Products
        • Table Selected Marathon Asphalt Products
      • Significant Events
    • NuStar Energy L.P.
      • Table NuStar Energy L.P.
      • Overview
      • Performance
      • Products
      • Significant Events
    • SemMaterials (SemGroup L.P.)
      • Table SemMaterials (SemGroup L.P.)
      • Overview
      • Performance
      • Products
        • Table Selected SemMaterials Products
      • Significant Events
    • Valero Energy Corporation
      • Table Valero Energy Corporation
      • Overview
      • Performance
      • Products
        • Table Selected Valero Products
      • Significant Events
    • Paving Companies
      • Oldcastle Materials (Oldcastle Inc./CRH Plc)
        • Table Oldcastle Materials (Oldcastle Inc./CRH Plc)
      • Overview
      • Performance
      • Products
    • Vulcan Materials Company
      • Table Vulcan Materials Company
      • Overview
      • Performance
      • Products
      • Significant Events
  • Economic & Marketplace Trends
    • Economic Crisis Peaks
      • Real GDP Growth Projected at Negative 0.8% for 2009
      • Economic Future Uncertain
      • Asphalt Product Producer Prices Skyrocket
      • Sharp Increase in Liquid Asphalt in 2008
      • Price Increases by Product
      • Asphalt Input Prices: Crude Up 75%+
      • Coker Projects May Further Reduce Asphalt Supply
      • Concrete Construction Input Prices High
      • Less Road Travel Not Easing Pressure on Aging Roads
      • Prices and Supply Jeopardizing Road Maintenance Asphalt Paving Budgets
      • Warming Weather Trends Benefit Marketplace
      • Weather Disasters Prompt Government Emergency Financial Response
      • Asphalt as a Green Industry
        • Table Asphalt Industry Recycling's Report Card versus Other Industries, 2008 Industry Tons Recycled (million tons)
      • Labor Shortages and Immigration to Hamper Road Building
      • Warm Mix Asphalt Positioned to Usurp Hot Mix
  • End User Markets
    • Paving Industry Consumes 93%
      • Total Construction Spending Declines
        • Table Total U.S. Construction Spending and Year-over-Year Percent Change, 2002-2008 (in billions of dollars)
      • Non-Residential Spending Starts to Slow in 2008
        • Table Total U.S. Non-Residential Construction Spending and Year-over-Year Percent Change, 2002-2008 (in billions of dollars)
      • Residential Spending Nosedives
        • Table Total U.S. Residential Construction Spending and Year-over-Year Percent Change, 2002-2008 (in billions of dollars)
      • Highway & Street Construction Down from Mid-Decade Growth Rates
        • Table Total Highway & Street Construction Spending and Year-over Year Percent Change (in billions of dollars)
        • Table Total State & Local Pavement Spending and Year-over-Year Percent Change, 2002-2008 (in billions of dollars)
        • Table Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) Total Highway Spending (Excluding Transportation Research) and Year-over-Year Percent Change, 2005-2009 (in billions of dollars)
      • Non-Residential Pavement Contractor Revenue Affected by Price Fluctuations
        • Table Total Non-Residential Pavement Contractor Revenues and Year-over Year Percent Change, 2002-2008 (in billions of dollars)
      • "Residential" Pavement Contractor Revenue Arcs Downward
        • Table Total "Residential" Pavement Contractor Revenues and Year-over Year Percent Change, 2002-2008 (in billions of dollars)
      • Roofing Contractor Revenues Decline 16% in 2008
        • Table Total Roofing Contractor Revenues and Year-over-Year Percent Change, 2002-2008 (in billions of dollars)
  • Selected Corporate Addresses
  • Selected Associations Addresses

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