Key Market Trends
Increasing Demand Due to Increasing Road Construction Activities
Most of the bitumen consumed is processed into asphalt for road construction. Asphalt is a mixture of rock aggregates and bitumen. Bitumen serves as a binding agent and thus, is responsible for the stability of asphalt.
Depending on the type of bitumen or composition of the mixture used, asphalt roads can be made suitable for regions with different climatic conditions or various levels of operational demands. Asphalt is also used for airport runways, parking decks, and working areas in ports.
Roadways is one of the key sectors that determines a country’s economic growth. Roads, airport runways, and parking decks are essential services that drive the economic activity by channelizing trade and mobility. Massive investments are required that help in modernization and maintenance of these systems.
Globally, the infrastructure sector is experiencing stable growth, as a result of increasing government spending to promote local infrastructure. In keeping pace with the growing economic activity and shifting demographic trends, spending on infrastructure activities is largely driven by developing economies in comparison to developed economies
In developing economies in Asia-Pacific, infrastructure activities are expected to increase significantly, especially in the transportation sector, owing to increasing urbanization and shifting focus toward developing secondary sector in these countries. Furthermore, increasing economic prosperity is driving the infrastructure financing toward consumer sectors, including transportation and manufacturing, which provide and distribute raw materials for consumer goods.
• India’s recent passed budget includes expenditure on development of National Highways, including projects relating to expressways, two-laning of highways, under the National Highways Development Project, six-laning of crowded stretches of the Golden Quadrilateral, a special program for the development of road connectivity in Naxal affected areas, development of Vijayawada Ranchi road, and for providing last mile connectivity.
China, on the other hand, is developing New Silk Road, for which the country has already built railway lines between Addis Ababa & Djibouti, Nairobi & Mombasa, and is likely to start projects in Uganda, Rwanda, and the Democratic Republic of Congo soon.
With such development projects, the demand for bitumen is expected to be the largest in the Asia-Pacific region, followed by Europe.
As these sectors have potential to fetch larger investments in near future, the governments of developing economies (such as China and India, among others) are taking initiatives by floating tenders reflecting opportunities in building infrastructure, essential for the growth of a specific sector. Furthermore, the emergence of megacities in both, emerging and developed markets, which reflects the shifting economic and demographic trends, will create enormous need for new infrastructure.