U.S. demand for asphalt is forecast to increase 3.7 percent annually to 27.9 million tons in 2017, according to a new report by the Cleveland-based Freedonia Group. This is equivalent to 154 million barrels of primary asphalt, the vast majority of which is refined petroleum asphalt.
Demand for asphalt is expected to advance from its low 2012 base, spurred by growth in spending on highway and road construction and building construction, the two largest markets. However, asphalt demand in 2017 will not reach the level seen in 2007.
Rising use of recycled asphalt pavement (RAP) and increasing interest in rehabilitating and repairing older or worn surfaces will serve as a check on asphalt demand advances.
Paving products accounted for 71 percent of asphalt consumption in 2012, and will remain the leading application for asphalt going forward. The passage of the Moving Ahead for Progress in the 21st Century Act (MAP-21), which guarantees funding for highway and road construction projects through October 2014, will provide an immediate boost to demand for paving materials. However, long-term gains will be limited by efforts of government agencies to maintain existing road networks.
Paving product demand will also be negatively affected by increasing use of in-place recycling road construction methods. These methods are favored by state transportation agencies because they are less costly but suppress demand for asphalt cement, the most frequently specified paving material.
Demand for asphalt emulsions, however, will benefit from rising use of RAP, as emulsions can be blended with old pavements to rejuvenate worn highway surfaces and repair moderately damaged highways.
Demand for asphalt used to make roofing and other products is forecast to rise 3.0 percent annually to 7.7 million tons in 2017. Advances will be spurred by the rebound in building construction expenditures.
The residential market will see the fastest growth, as strong gains in single-family housing completions will boost demand for asphalt shingles. In the nonresidential segment, rising construction spending will support demand for low-slope roofing products, such as modified bitumen membranes, roll roofing and mopping asphalts.