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The global asphalt market size stood at USD 222.0 million in 2019 and is expected to reach USD 321.5 million by 2027, exhibiting a CAGR of 4.8% during the forecast period.
Asphalt is also identified as bitumen, which is a black and sticky, highly viscous liquid, or a semi-solid formula of petroleum. It is found in the natural deposit or can be used as a refined product that is classed as a pitch. The major application of this substance is roadways construction, where it is used as a binder that is mixed with aggregate elements to produce concrete. It is used for other paved parts such as airport runways, footways, and car parks. Also, the product is used in bituminous waterproofing, which includes producing roofing felt and sealing of flat roofs. Bitumen production is according to the requirements of the end-use, which is achieved either by blending or refining. Some other applications include sealing and insulating for a variety of building materials, such as carpet tile backing, pipe coatings, and paint.
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Usage of Additives and Modifiers to Improve Durability is a Prominent Trend
Asphalt additives or modifiers are used to improve the aesthetic appeal and durability, also enhancing the performance of the product while improving the shelf life. Some of the modifiers that are used are styrene-butadiene-styrene, crumb rubber, atactic polypropylene, and natural rubber. They are added to this substance to improve its elasticity and strength. These modifiers also help in increasing the abrasion resistance and aging ability. Some additives are used to improve the durability and life span of the concrete. For roofing applications, crumb rubbers are used as they provide high-temperature resistance and deformations. Increasing adoption of modified asphalt is surging the lifespan of the construction structures and roadways, which, in turn, is expected to support the bitumen market growth.
Growing Demand from the Construction Industry to Propel Growth
About 70% of the bitumen is used in road construction which is likely to cause an uptrend in the market growth. Increasing construction of the paving asphalt, along with favorable funding, awareness to improve aging of the infrastructure, and advances in non-building construction activities, such as highway and street segments are the key attributes driving the market trend. Moreover, favorable economic conditions will further boost the overall revenue in the construction industry where many governments are investing in infrastructure projects such as highway or roadway repair, road construction, and rehabilitation. Furthermore, improving technological advancement in the mixing plants, along with the manufacturers working to develop innovative solutions to keep up with the consumer demand would drive growth. Also, they are trying to keep up with the industry requirements.
Increasing Awareness about Climate Change to Drive the Market
Nowadays, consumers are more aware of the changing climatic conditions that are affecting the infrastructure. This, along with the increasing global warming has influenced many consumers to adopt technologies to protect the structure from extreme weather conditions. This has resulted in the growing roofing requirements for new structures, as well as old structures. Growing recreation and waterproofing applications to protect them from climate change is also supporting the growth of this market. Waterproofing of infrastructures is essential to avoid mildew, mold, and decay, and prevent leakages and dampness in buildings, while also safeguarding the construction of the structure.
New housing systems for single and more family residences will continue to pose as a market boosting factor in roofing applications. Many builders are opting for these products due to their cheaper cost and easy installation. The residential re-roofing will also increase the demand as homeowners will replace older roofs with newer ones. This roofing provides attractive appearance along with waterproofing and abilities that protect the structure from different weather conditions. This increasing awareness has been a driving factor for asphalt market growth.
Fluctuating Prices of Raw Material to Hinder the Market Growth
The restraining factor affecting the growth of the market is the fluctuating prices of raw materials. The materials are crude oil and petroleum. Prices of these materials are volatile based upon the trading on the stock exchange. This volatility in the prices can lead to high manufacturing costs. Furthermore, a tight supply of raw material due to these price fluctuations acts as a restraining factor towards market growth. Moreover, a shift towards cement roadways in many regions may risk the overall market growth.
Paving Segment to Remain the Largest During the Forecast Period
Based on the product, the market is segmented into paving products, roofing, and others. Among these, paving is the largest segment due to its prominent growth in the construction industry led by the rising demand for better roadways to lower the accident rates. Increasing construction of the roadways from the developing economies such as China, India, and others shall augment the growth of this segment. Bitumen gives good performance and provides durability to climatic and traffic conditions. It is used in the paving of base courses for airports, bridges, tunnels, railway tracks, and others.
Moreover, the product is commonly used as a variant roofing shingles that can be procured in different forms based on their performance, appearance, texture, and others. These roofing shingles provide distinctive appearance while also delivering optimum protection from harsh weather conditions. Increasing applications of waterproofing and recreation in various regions is surging the demand, which in turn, is driving the growth of this segment.
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Roadways Segment to Dominate the Market During the Forecast Period
Based on the application, the market is classified into roadways, waterproofing, recreation, and others. The roadways segment is the largest due to the growth in the construction industry. Rapid urbanization and increasing population are supporting this market growth for roadways applications. The substance is used as a binding agent for roadways and highways to bind the materials together and provide durability and sturdiness. The growing connection between countries and regions is making this segment dominant in the market. It is also used as a waterproofing agent for roadways, and well as for infrastructures. They prevent accidents from happening and provide residential and non-residential structures from harsh weather conditions. The growing construction industry in different regions is supporting the growth of this segment.
The recreation segment is expected to show growth during the forecast period. High population growth is supporting the growth of this segment. Growing population and urbanization are leading to the high demand for bitumen for application in residential and non-residential structures. The growth of the market is affected due to the outbreak of COVID-19. It is expected to show a slight decline in the construction sector. Therefore, the recreation segment is also expected to show a decline in the year 2020 but will exhibit a positive growth during the forecast period.
Asia Pacific Asphalt Market Size, 2019 (USD Million)
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Asia Pacific is the largest market and is expected to show considerable growth due to the expansion of the construction industry. This growth is attributed to the high demand from developing economies, such as South Korea, China, and India. Moreover, China is the key consumer due to the rising population and urbanization in the region. Huge infrastructure growth with innovation in the construction industry, along with industry consolidations is likely to boost the regional market growth during the forecast timeframe. With an increase of the coronavirus in the countries of Asia Pacific, the construction industry is bracing for slower economic growth.
According to the National Asphalt Pavement Association, about 65% of the bitumen pavement market is publicly funded mainly for highway projects, where non-residential and residential construction accounts for 35%. The market in North America is expected to grow during the forecast period due to the increasing application of recreation of residential buildings in the region, coupled with the growing trend of maintenance of roadways and highways. Strong economic growth and increasing construction activity, along with favorable governmental regulations will further propel the demand considerably. According to National Asphalt Pavement Association (NAPA), approximately, 3,500 asphalt mix production sites are operated in the U.S. where the production of asphalt pavement material is over 350 million tons per year. Currently, most of the U.S. construction participants are scared of domestic project interruptions from raw materials sourced from China due to the COVID-19 outbreak.
The market in Europe is anticipated to show significant growth due to the increasing application in repairs of roadways and waterproofing of infrastructures. Increasing expenditure on road repairs and protection of structures during winters are increasing the product demand. Eastern European countries such as Russia, Poland, Hungary, Croatia, Czech Republic, and others still need to improve on the road quality, while the Western European countries including Germany, France, Belgium, Spain, and others have high-quality and extensive road networks.
The market in Latin America and the Middle East & Africa is expected to show significant growth during the forecast period. Extreme weather conditions in these regions would increase product demand. Ideally, it is used for waterproofing and building roadways due to growing urbanization and population. Moreover, the easy availability of raw materials will further show more attractive growth opportunities during the forecast period in these regions.
Key Players are Forming Growth Strategies to Maintain Their Dominance in the Market
Global asphalt market share is fragmented with key players operating in the industry. They are CEMEX S.A.B. de C.V., China Petroleum & Chemical Corporation, Exxon Mobil Corporation, Royal Dutch Shell, and others. They have used several strategies such as partnership, acquisitions & mergers, investment, & divestment for the growth of the market. Furthermore, large, medium, and small-scale companies are offering a highly upgraded product portfolio and better customer services.
This trend is projected to positively impact the global market during the forecast period. For instance, in October 2019, Shell entered into a strategic partnership with Tiki Tar to sell bitumen to the customers in the pavement segment, including state and national highways, village road, and airport runways in India. This joint venture will supply its products under the Shell Bitumen product portfolio.
The asphalt market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, products, and leading applications of the product.
An Infographic Representation of Asphalt Market
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Besides this, the report offers insights into the asphalt industry trends and highlights key industry developments. In addition to the aforementioned factors, the research report encompasses several factors that have contributed to the growth of the market over recent years.
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Value (USD Million) and Volume (Kilo Tons)
Fortune Business Insights says that the global market size was USD 222.0 million in 2019 and is projected to reach USD 321.5 million by 2027.
In 2019, the market value stood at USD 222.0 million.
Growing at a CAGR of 4.8% the market will exhibit steady growth in the forecast period (2020-2027).
The roadways segment is expected to be the leading segment in this market during the forecast period.
Increasing demand from the construction industry is the most critical factor driving the market.
Asia Pacific held the highest market share in 2019.
The growing construction industry and rising awareness regarding climate change are expected to drive the adoption for this.
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